The media loves to tell us that housing is out of reach for younger Australians. While it’s true that buying can be challenging, especially for younger generations, the good news is that most people can still get onto the property ladder, even on a modest income. Working with the best buyers agency or a professional buyers advocate can make the journey smoother.
Regardless of who you are, the first step is understanding where you stand financially. Let’s say you have $50,000 saved, earn $80,000 a year, and have a HECS debt. A mortgage broker can help you grasp your full financial picture, including income, savings, and debt. With their guidance, you’ll see what’s possible, whether you’re eyeing an investment property or a place to call home. This clarity is crucial, as savings and income are significant factors in determining what you can afford.
With an income of $80,000, banks may lend five to six times that amount, giving you a borrowing capacity between $400,000 and $500,000. At this stage, with a 5% deposit, you’ll need roughly $20,000 for a property in that range.
After understanding your budget, researching ideal locations is essential. For instance, in Victoria, you might opt for a boutique apartment in a well-established suburb closer to the city. Alternatively, you could look to areas like Newcastle in NSW. This quality-over-quantity approach often yields steady gains, especially when properties are in sought-after suburbs.
Once you find a property, think about purchasing as an owner-occupier first. Living in the property initially can help reduce expenses and may allow you to access incentives like stamp duty exemptions. Renting out a room is a clever way to earn additional income, further offsetting living costs.
After a year, revisit your bank to have the property revalued. Ideally, you’ll see an increase in value, creating equity that could eventually fund a future purchase. With this buyers advocacy approach, you’ll stay on track for long-term growth.
In a few years, if you have a partner, pooling resources boosts your buying power, accelerating your portfolio growth. By maintaining a simple cycle of buying, holding, revaluing, and buying again, you’ll lay a solid foundation for a strong portfolio over time.
Over a 20-year period, purchasing three to four properties could lead to substantial wealth. Start in your early 20s, and by your late 30s or early 40s, you could see significant growth in your property values. Buyers advocates often suggest holding properties for a few years before buying the next, allowing capital appreciation to work in your favor without feeling rushed.
Though this plan may sound straightforward, that’s the point: property investment doesn’t have to be complicated. I started my journey this way in my 20s and have built significant wealth by following this formula. You don’t need to buy dozens of properties or chase high-risk investments—just patience, a plan, and the willingness to start.
Engaging a trusted buyers advocate through Henderson’s buyers advocacy service is your best chance at navigating the competitive real estate market.
