Thinking of First Home - Young and on Single Income

bargainboy17 on 19/03/2017 - 23:34

Hi Ozbargainers,

I am 22 years old, based in WA and work in a job which pays 80k per year. I am interested in purchasing my first property and plan on buying one before my 23rd birthday.
I have roughly 50k in savings and working to accumulate more to at least save for a 20% deposit (or at least 70k).

I have been looking at 2 bedroom units within the 320k-390k bracket with the intention of having it as my primary residence for a number of years and hopefully moving into a larger house later down the track.

Although I am keen on the idea, I don't have much knowledge of property and was wondering if anyone had some helpful advice on purchasing your first home (and if it's wise to buy a 2 bedroom unit as a long-term investment).

I am finding the process a bit daunting and needed some good ol' advice from the ozbargain community :)
Any advice or links to helpful resources would be appreciated!

Financial

Comments

  • captobvious on 20/03/2017 - 00:28
    +1

    Buy something. when you buy consider location and demand.
    live at home and pay off you debt as much as you can.
    hope values goes up in WA.
    maybe use equity to buy next home

  • altomic on 20/03/2017 - 01:36

    save enough so you don't have to pay the mortgage insurance i.e. 20% deposit.

    don't forget first home buyers grant of $10,000.

    also WA have an additional $5,000 grant if buying a new home (i.e. a house/unit/etc to be built)

    then buy a 2 bedroom unit. get a flat mate to "share the rent" i.e. help pay off the mortgage.

    put all your money in to the unit -live like the ultimate ozbargainer.

    for every dollar you pay off your mortgage in the first year will save you $3 at 10 years time.

    you sound like you've got your self together.

    that's really good work being in the position you are.

    • MeesusEff on 20/03/2017 - 11:54

      Unfortunately FHOG doesnt cover WA for established houses anymore :(

      • altomic on 20/03/2017 - 14:00

        bummer

  • spackbace on 20/03/2017 - 01:53
    +1

    Good on you for getting in that position!

    I'd recommend looking at a house, maybe somewhere further out than you're planning. Just so you have the space, and the value of the house should increase greater than the unit.

    • [Deactivated] on 21/03/2017 - 00:20

      "the value of the house should increase greater than the unit"

      Not necessarily if the house is further out. A unit in a good location can have a higher growth.

  • garetz on 20/03/2017 - 04:27
    +1

    The best thing you can do is buy a place, rent it out while living at home, you will pay it off within 10 years. That will create equity you can use for further investment when you think its worthwhile.

    The faster you pay it off, the better your financial position will be.

  • starburstyellow on 21/03/2017 - 00:10

    Also as you are looking at a unit, be aware of strata fees. They are on top of your mortgage payments and can add up quite quickly. I would personally be looking at a house in a cheaper area, to avoid strata fees all together. IMHO of course.

  • ar993 on 22/03/2017 - 21:27

    What I read about WA (Perth) ppty market, the price is currently going down (unlike Syd & Melb). The possibility is high that value may go down further in coming days. If you must buy in WA, I'd say better to wait and see what happens in coming days.

    Alternately, you can also try to get something in in eastern states. Ideally it should be as close to the city as possible (i.e. easily rentable) and either new or not more than 2-3 yrs old. It should also be a house or townhouse, not flat or unit. After negative gearing amd claiming the depreciation of structure from tax (if it's relatively new), you will possibly be paying nothing out of your pocket.

    Price in Brissy has not appreciated as much as Syd & Melb. I reckon there's a big room to grow there in the long run. Do some research on that market.

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