5 ways to bag property in a tough market
Are you ready to buy in the current property market? The Australian housing market can be challenging to navigate, but with the right strategies, you can get your foot on the property ladder without breaking the bank.
Seven in 10 Australians now believe that the rental crisis and high interest rates are locking Australians out of the property market. But according to buyer’s agent Lloyd Edge, there is still potential to “snap up a great deal” in the current marketplace and make your budget stretch further, whether you are an investor or owner-occupier.
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He has provided five pieces of advice to help investors and first-time buyers alike make their mark on the market:
1. Look for the ‘tired’ properties
When searching for a home, consider looking for a property that needs a bit of TLC. According to Mr Edge, “a ‘tired’ or older-looking property in need of renovation will (most of the time) sell for less than a fully renovated or brand-new home.” Purchasing a property that requires renovations can be a great way to get onto the property ladder while staying within your budget. You can add value to the property by fixing it up yourself, which also means you can manufacture equity and increase the property’s value in the long run.
2. Consider rent-vesting
Rent-vesting involves purchasing an investment property and renting it out while living in a rental property yourself. This can be a smart way to build wealth and create a passive income stream. If you’re struggling to find affordable properties in your desired location, you can always open up your search to properties in regional areas or interstate. The buyer’s agent advises that “these properties will generally also have higher rental yields than capital cities, so you have a cash buffer in case anything unexpected comes up.”
3. Do it together
A less utilised way to purchase property in today’s market is to band together with family or friends.
“When you add up your combined savings and income, your purchasing power is far greater than if you tried to do it alone,” Mr Edge noted. Pointing out family and friends as usually the best option if you do go down this route, he did however warn that it’s essential to ensure everyone involved is on the same page about the future plan for the property, and agreements are drawn up in case someone wishes to sell their share down the track.
4. Look to the bridesmaids
Bridesmaid suburbs are an excellent opportunity to get into a growing area while it’s still affordable, Mr Edge shared. Usually, these suburbs are located near areas that have already undergone gentrification or urban renewal and are likely to experience similar growth and improvements in property values. Looking at these options means “you can watch your property gain value in the near future”.
According to Mr Edge, this does require would-be buyers to do their research.
5. Buy below median
Buying a property below the median house price in a suburb is always a smart move, Mr Edge stressed.
Flagging that “you’re more likely to recoup your money plus make a tidy profit from the sale” if you purchase below market value, Mr Edge acknowledged that when you buy below the median house price, you can create equity instantly, which gives you more options moving forward.
All in all, buying property in Australia can be a challenge at present, but there are ways you can make the process easier and more affordable. Whether you’re looking for a fixer-upper, considering rent-vesting, teaming up with friends or family, targeting bridesmaid suburbs, or buying below market value, there are ways to get onto the property ladder and start building wealth through property investment.