Advice for Moving Out of Home

Riczter on 24/11/2013 - 20:13

I'm a big boy now and getting sick of mooching off my parents and putting up with their embarrassing antics and am keen to move out of home. But I'm really not sure where to start… I need to do some research obviously, at this stage my plan is to get a rental for now, maybe share with some mates.

Obviously buying a house makes more sense financially, not wasting money on rent, but I'm not sure I'm in a position financially to be able to, I have about 10k in the bank, earning 50k per year. Saving maybe 1.5-2k per month. But I got a 3 week holiday to Japan in February, and talks of NZ in June so there goes half my savings :/ And my car is dying a slow painful death, so will need another one soon, my bike needs $1000 work, and I want to get my wisdom teeth out, all of which costs money :( Do they still do no deposit home loans? What's the catch with these? I figure now is the best time to have a large mortgage with interest rates so low, as long as I can keep up when interest rates increase and my payments go up..

I've had a quick look at some rental prices and damn! It's not pretty :( And I would like a nice clean modern spacious place in a good location as well so that isn't going to help keep the cost down :/ I'm fussy :P

So I am chasing some tips and general advice focusing on and around the following questions:

  • Should I rent or buy? Can I buy in my financial position? What is the First Home Buyers Grant atm? No Deposit Home Loans? Pros & Cons..
  • Advice for sharing (renting) with mates? Or buying and then living and renting out rooms to mates.
  • How do I go about finding the best deal on a rental? I know 2 people in real estate, so they may be my best bet in finding a good price on a nice place, but any other tips on finding the best deal??
  • What websites to use to browse properties in WA (south of the river).
  • Best places to compromise in order to get the cheapest rent, ie: location, block size, age of the property, etc.
  • Any other tips, advice, or your own experiences that you wanna share..

Thanks

Home & Garden

Comments

  • ilostnemo on 24/11/2013 - 20:41
    +24

    Stay at home for another year, you can't afford to move out.

    If your saving 1.5k to 2k a month, I'd guess you aren't paying board/contributing.

    Stay at home, save some more coin, Also it's a crappy feeling paying rent, while you're on holidays.

    • Riczter on 24/11/2013 - 20:44
      +1

      That's true, but I'd still be getting paid while I was on holidays.. At the moment I pay $100 per week board and buy food every now and then and run the younger ones around.. 2k a month is a good month, usually probably closer to 1.2-1.5 but it always varies depending on how much stuff I have bought off ozbargain haha

      • RandomNinja on 24/11/2013 - 22:13
        +9

        +1 stay home.

        At $50k, you're getting roughly $3.5k after taxes/month. If you're savings avg $1.2-$1.5k/mth, it implies your monthly living expenses are $2k (IMO rather high considering you're living at home)
        Looking at Commbank's mortgage calculator, that only gives you $250k to play with for a 30 year loan term. If you only made minimum repayments, you'd pay more interest than principal at the end!

        So, you could get a small apartment now (studio/1bdr) depending on location, but you'd pretty much give up your freedom for the next 30 years…

        If you absolutely must get out, suggest you start saving as though you had a home loan (ie: no dipping into it!) for 12 months while you research the housing market. If you have the discipline and don't give in to temptation, then you'll be ready!

        • Riczter on 24/11/2013 - 23:44

          Good Advice, thanks! I reckon if I tried I could sustain 2k savings per month, but that would mean be leading a boring life which I don't wanna do. I'd rather have some fun with my life now while I'm young and able, I definitely don't want to be 'losing my freedom for the next 30 years' by making the wrong choices now…

        • iseenya on 25/11/2013 - 16:54
          +8

          The people here saying "you'd pretty much give up your freedom for the next 30 years…" and "you wouldn't want to be stuck with a 30 year loan anyways", don't seem to understand how a mortgage works. The term of the loan is used to work out the repayment schedule - it doesn't mean that you actually have to live there for that long, as these statements seem to imply.

          The average Australian mortgage duration is about 8 years; if you don't want to keep the place, you sell up whenever it suits you, pay off the bank and move elsewhere. Many banks expect about 5 years minimum loan term or they will hit you for extra charges to cover their unexpected costs. This can be quite onerous if you have a fixed interest mortgage loan. But in any event, it's not a life sentence.

        • DealzEddy123 on 25/11/2013 - 17:35

          totally agree. (i've got a mortgage)

        • polol on 26/11/2013 - 10:18
          +3

          My 52k gross is netting me $3.1k a month. He's already paying $100 a week in board, so that makes his net income 2.6k. He said he occasionally buys food. So that means he's saving 1.2-1.5k/2.6k which is 50% or so without even trying.

          Sounds pretty good to me.

  • 2pro4sho on 24/11/2013 - 20:53
    +1

    I suggest renting if you want to move out. You really don't have enough for a deposit or the income to pay the mortgage. No bank will give a single income earner of 50k a home loan sorry. PLUS if you are young you wouldn't want to be stuck with a 30 year loan anyways. Go to domain.com.au and realestate.com.au and do some research or look at a share house/room

    • jakentta on 25/11/2013 - 16:45

      That was 3-4 years ago, but I was making $45k, wife was (and still is) a stay at home mum with 3 kids and we did manage to get a mortgage. Wasn't easy and banks wouldn't do it, but local credit union did give us $200k, which with our $25k savings and first home buyers' grant was just enough to get us a nice (although quite small) house in regional Victoria.

  • wharlie on 24/11/2013 - 21:09
    +11

    My advice is to stop being fussy.
    Get into the real estate market with what you can afford.
    If this means buying a small apartment on the outskirts then do it.
    If you can stand to keep living with your parents even better, you can rent out the apartment and use the rent to help pay it off.
    Just look for something that is solid with little maintenance and low body corporate.
    Think of it as an investment decision and try to keep emotion out of your decision process.
    Look for an area with growth potential.
    When you earn more money then use the equity to get something better.
    The longer you put off buying the harder it will get, house prices will continue to rise, despite what the doom merchants keep saying, and if you think you have expenses now, wait till you have a family.

  • [Deactivated] on 24/11/2013 - 21:50
    +12 
    Obviously buying a house makes more sense financially, not wasting money on rent

    You would 'waste' far more money on paying the interest on a mortgage (as well as mortgage insurance if you have less than a 20% deposit). Then there's rates, body corp (if applicable), insurance, repairs, maintenance etc.

    Rent. For now. But with the ultimate goal of saving a decent deposit and buying. Rent a room somewhere so that you don't have to immediately furnish a place - that way if you want to go back home after a few weeks/months then you haven't just bought a new fridge/couch/washer/tv etc. It also means you can acquire these things slowly, allowing you to get better stuff for better prices.

    Better yet, suck it up and stay home for another year and save like crazy - get an extra income, stop spending etc. It is far easier to save when you don't have bills and rent to pay.

  • Glittergirl on 24/11/2013 - 23:25

    I agree with what others have said - it is probably worth putting off buying a property for now and accumulating some more savings. Maybe check in with your bank or a mortgage broker to gather more information about the costs involved with buying a property with a small deposit (ie. mortgage insurance which could be compulsory if you don't have a certain percentage of savings). There will probably also be stamp duty… Have a look at Domain for example http://www.domain.com.au/public/fhbgcontent.aspx?cms=fhbg_ho….

    Info about the First Home Owners Grant in Perth is here. http://www.finance.wa.gov.au/cms/content.aspx?id=344

    Good luck :-)

    • Riczter on 24/11/2013 - 23:42

      Thanks! Good Advice

  • Riczter on 24/11/2013 - 23:42

    So far the consensus seems to be stay at home and save enough money for a deposit on a home. :( Makes sense.
    What about the renting with a few mates option? If I can get 3 mates to share a nice 4 bedroom house with me, that means rent is cut down to a quarter, prob $150-200 each pw, which is much more manageable, so potentially I could get out of my parents place and still save up to buy a house 3-4 years down the track… Any potential problems with this plan??

    • tyler.durden on 25/11/2013 - 07:31
      +20

      Still losing 50 to 100 per week

      Also best way to lose frenz is to live together

      • sama on 25/11/2013 - 18:14
        +1

        So very very true. Best way to lose friends is to live together or do business together.

        It doesn't always happen. But it happens a lot (especially if you really are fussy). Living together with parents and having occasional fights is better than fighting with a mate who might not love you as much as your parents.

        • Riczter on 25/11/2013 - 18:49

          Definitely a concern for me. I've got some good mates that I wouldn't wanna risk alienating by having to put up with me 24/7 haha. Another option is uni students, theres always plenty of those looking for accomm or someone to share a house. Plus good opportunity to make some new friends and do some networking.

        • Baghern on 25/11/2013 - 21:34
          +2

          I laughed in my best friend face when he suggested we moved in together… he drove past a house and suggested it…

          Friendship and living together relationships are totally different.

        • Riczter on 25/11/2013 - 21:49

          I have a best mate who wants to but I don't want to with him. I have another best friend who doesn't want to/cant but I do want to with him. Life's funny like that -.-

        • altomic on 26/11/2013 - 11:50

          wait a year to save up more of a deposit then buy a house and have mates move in to help pay mortgage.

    • 2pro4sho on 25/11/2013 - 09:23
      +4

      Plus costs for utilities, internet, food, transport, furniture/appliances. Stay at home while you can :)

    • RandomNinja on 25/11/2013 - 11:07

      If you're renting with mates, I'd foresee you spending more on eating out and going out which makes it even harder to save.

      FWIW, my fiance (at the time) and I stayed with our parents until we were 28… but that allowed us to purchase a home using a 20% deposit and get married in the same year!

  • ferguscan on 25/11/2013 - 05:09
    +1

    You don't need to rent a whole place just for yourself.

    Get some second-hand furniture, and rent a room (either with friends, or strangers).

    It's the cheapest way to live, without mooching off your parents.

    And it's a lot of fun.

  • Euphemistic on 25/11/2013 - 07:59

    If you are looking for a rental, don't look for a nice new pretty house like mum and dads. Get something older, with a rough or minimal yard. That was one of the lessons I learnt quickly, looking after a big yard sucks when you are wanting to do other things like holidays and mucking about with mates. Older houses also cope more if you don't clean the bathroom often, they never look clean and sparkly no matter how much you try so you don't need to bother.

  • thereyougo on 25/11/2013 - 09:02

    When you do leave pack lite, I moved out 25years ago and 3 housed later I still have many boxes of shit. One day ill go through my treasures.

    • [Deactivated] on 25/11/2013 - 15:50

      I left my parents with every possession I owned in a shoe box, other than my car and a garbage bag of clothes.

  • mls82 on 25/11/2013 - 09:36
    +7

    I don't want to discourage you from ever investing in a property, but I personally would avoid it on your income. Bear in mind the following, from my own personal experiences.

    Settlement costs:

    • I paid over $10k's Lenders Mortgage Insurance on a 95% loan / $450,000 property.
    • Solicitors fees, searches, etc. cost me well over $3000. I felt absolutely scammed, but in any case this is likely to cost you at least $1000 and more likely $1500.
    • Government and Reg. fees cost me over $1000.
    • In your circumstances you're probably looking at $2000 minimum to kit out a place, as I'm presuming the only thing you own is a bed. White goods, sofa's, vacuum cleaners, etc. all add up.

    Reoccurring costs:

    • When interest rates eventually recover and go upwards of 8%, will you still be able to service a mortgage?
    • Strata / Body Corporate costs me $2500 per year in a relatively low upkeep unit block. If you stumble into a complex with lifts and swimming pools you would be paying a lot more.
    • Rates and Utilities (e.g. water) are going to be at least another $2500 per year.
    • Contents insurance (I'm presuming your parents currently pay for) will be a few hundred per year.
    • bluedufflecoat on 25/11/2013 - 16:39

      Ohhh… I hate the rates and water bills (they're absurdly high!!) … good advice mls82! :)

      Water bills come with a parks fee each year, of about $250, in addition to the supply fee and the usage fee.

    • May4th on 27/11/2013 - 13:48

      Apart from exceptional circumstances, avoid paying LMI if possible. Absolute waste of money from which you get no benefit. Other options include borrowing money from your parents if they have some equity, or get a guarrantor.

    • eye on 29/11/2013 - 19:09

      you are ripped off. I paid about $1000 for my solicitor just a few weeks ago which covers basic default searches as well. If you are a first home buyer, you don't pay and stamp duty at all which leave just about 300-500 for loan fees/title registration fee etc.. Most banks will waive your loan application fee if you bargain with them. I stayed with CBA and they gave me a very good rate even compared to 3rd party lender who has no branches in Australia.

  • bocca on 25/11/2013 - 09:37

    Save enough money for a deposit then move out.

    • Shwayne on 25/11/2013 - 10:28

      This is important, if you rent you'll find it incredibly hard to save money unless you budget very tightly.

      You'll be in a similar scenario when you're paying off your mortgage, but you won't need to save up for a deposit.

  • JediJan on 25/11/2013 - 09:41
    +10

    I used to work in finance which required borrower to put down 10% deposit. I would go one further and say that if you haven't got 20% then you really aren't serious about buying. No deposit loans usually have the highest interest rates … and repayments. On $50K pa you really should have saved more; what I mean about being serious. I think you should be grateful of the advantage your parents have given you; seriously $100 pw probably wouldn't pay all your utilities. So, stay at home and get saving like mad, get that 20% down, pay fortnightly instakments on the loan, and if you are diligent pay it all off in 15 years. Takes dedication and maturity to do that though. Don't forget to factor in rates and all the things that will break down along the way. I think yiu have set your sights too high at present. If you really have to move then move in with others and see how much you can save whilst staying there. My feeling is you will be back home within six months though. Set yourself a budget on paper. Start with your ins and outs every fortnight indicating amounts spent in columns, to look at where your money is going. Sometimes seeing the spreadsheet display expenses totals in black and white is a wake up call. When I saved for a deposit years ago I was only earning $25K but I saved $10K pa as I moved back home that year (after the reality of renting, low income and spending away for a few years). Maybe you need a second job to get ahead if you cannot restrict any expenditure. You shouldn't be struggling to save more whilst you are still living at home.

  • Scrooge McDuck on 25/11/2013 - 09:49
    +27

    ¿Why wanna move out the home? ¿You do the sex with girl? Give mam and pap a 50$ for restaurant to go out. :D

    • [Deactivated] on 25/11/2013 - 10:08
      -1

      ¿Why wanna move out the home? ¿You do the sex with girl? Give mam and pap a 50$ for restaurant to go out. :D

      dafuq?

      • Shwayne on 25/11/2013 - 10:27
        +1

        Translation: If you want to bring girls home, simply ask your parents if they'll go out for a night, give them $50 as an incentive to pay for their dinner. Seeing as they're in a relationship, they'll understand.

        • Riczter on 25/11/2013 - 14:09
          +26

          $50?? Where am I sending them? Maccas?

        • iseenya on 25/11/2013 - 17:04
          +3

          Do you want fries with that?

        • humdingaling on 25/11/2013 - 17:05
          +1

          the local pub/bowlo or RSL

        • kRaYziE666 on 25/11/2013 - 17:57
          +7

          25 cheeseburgers between twwo people? damn they can eat

        • Soybeanus on 28/11/2013 - 18:01

          The world hasn't inflated that much yet

  • AlanHB on 25/11/2013 - 10:41
    +13

    So let me get this right. If you are living with your parents, I assume you would be paying for very little. So no rent, bills, water, food, electricity. Realistically you could spend nothing and it would be all good.

    Your income is $50k PA, so your net weekly pay is around $800. Each month you make $3,200.

    Of this you manage to save $1,500 minimum. So you are spending $1,700 a month.

    $425 a week.

    What are you spending your money on? For a person with no expenses (maybe with the exception of a mobile phone bill) your spending seems pretty excessive. This is something you'll have to put into line if you add rent/food/bills on top of this.

    Otherwise I'm going to go against the flow here, if you want to move out, move out. Sure it makes "logical sense" to get someone else to pay for your expenses, but I wouldn't put your parents through it.

    They've paid for the first 20 years, I reckon it's time to give them a break and pick up some slack. I'm the oldest of 5 children in my family and we've all moved out now. It's great to see my parents now enjoy their income in ways they couldn't whilst supporting us all, dad's home theatre gets bigger every day, mum is picking up expensive guitars and they're both going overseas regularly. I reckon they deserve a proper break rather than paying for me.

    It's also when you move out of home that you can call yourself "independent". If you want to grow up, it's a step you'll have to take.

    As for moving in with some friends, don't do it. It almost always ends up in tragedy. I moved out with some friends about 10 years ago. Lived together for a year. Even though time has passed since then I'm still angry/hurt about what went down. My best mate at the time and I, formerly inseperable, slowly grew apart, ended up having a bit of a punch up in the final week, didn't talk for another 2 years or so after. We've tried to reconnect since then but the damage was too excessive to really get back to where we were before.

    • exc3113nce on 25/11/2013 - 10:48
      +2

      I think he should address his current expenditure before he moves out. Plan everything. I have a friend who wanted to be independent and he moved out and bought a house - only to need to constantly be borrowing from his parents due to the mortgage.

      • AlanHB on 25/11/2013 - 12:11

        Well that just means that your friend had no idea how much living costs, because his parents paid for everything before.

    • eye on 29/11/2013 - 19:12

      +1. I used to spend $50-$100 max a week on everything else excluding rent. Cheap old days :)

  • Riczter on 25/11/2013 - 11:10
    +2

    I used to do a budget spreadsheet where I laid all my expenses out, but stopped doing it after a while. I should get that started back up again, so I can see where I can cut back. Also I don't intend to be still earning 50k in a few years time. With any luck I'll be up to 75k within 4-5 years. Then I'll probably be in a better position to service a homeloan. And you are right, I'd rather not shell out on mortgage insurance so I need more in the bank first.

  • Riczter on 25/11/2013 - 11:15
    +2

    My parents have spent their whole lives only just scraping by, they lost a lot of money in the housing market downturn, and have been renting ever since. They've long since given up on their dream of owning their own home. Very depressing really. I don't want to live the same way so I am determined to set myself up so I can have a good prosperous future. Obviously LIFE might have other things to say about that but we'll see how we go ;)

    • AlanHB on 25/11/2013 - 12:08
      +4

      I obviously don't have all the information here, but aren't you directly contributing to your parent's lack of ability to save up for a home?

      • Riczter on 25/11/2013 - 12:14
        +1

        Yeah, but I've got two younger siblings as well living at home. I could pay more board but I help out in other ways as well.

        • ilostnemo on 25/11/2013 - 13:09
          +2

          My first property was an investment property, that maybe an option, I then moved in 12 months later, the taxman was nice to me as I managed to claim a lot of the fees involved in getting a home loan.

          Your parents, should meet up with my parents, they also did some crappy real estate deals, I still scratch my head at why anyone would sell in a downturn.

          I can't imagine anyone living on $200 a week, man needs to eat, put fuel in his car pay bills etc.

        • Riczter on 25/11/2013 - 13:12
          +1

          Yeah they made some bad choices but mainly it was just bad timing and they got themselves between a rock and a hard place :/ We used to be in a big beautiful house, in the middle of a nice suburb. Now we are out woop woop in a crumbling dump, however no neighbours, so I chuck some sick parties ;)

        • AlanHB on 25/11/2013 - 13:36
          +4

          This is how my student Centrelink lifestyle $200/week usually ended up.

          Rice/Pasta/Sausages for a week - $20/week

          Rent - $100/week

          Bus - $10/week

          Beer - $70/week

          Whenever we were slammed with large bills we'd keep calling for extensions until we'd finally get enough together to pay. However as these things go I found that stacking shelves was a great way to make cash and added another $300/week on top of the above after about a year of $200/week.

          I'm not saying it's optimal, but definitely doable. I was actually pretty comfortable once I stuck the extra casual job on top of that.

          For this reason I cannot understand people who are on $50k a year complaining that they do not have enough money to move out. I know people on $100k who say they don't have enough money to move out. I think it's more about the person than the cash.

        • Riczter on 25/11/2013 - 13:53
          +4

          Yeah absolutely, I think it's also about how the person has been brought up and what he's used to. Take me for example I have no problems saying I am a bit spoilt. I've been lucky, but I've also worked hard to get where I am. I got a job as soon as I was old enough at Woolworths while I was still at high school, I worked 4 jobs in my gap year, at one stage earning over a grand a week at 64hours per week, then went to uni and got a degree, now working full time for 50k, with future income increase opportunities, plus I got a little side business going at the same time which I can expand on if my full time job collapses (don't wanna keep all my eggs in one basket).

          For this reason I've always had savings in the bank, and I've never not been able to afford something if i really wanted it. This makes me spoilt and unwilling to settle for a simpler lifestyle, coz I am used to a more 'lavish' lifestyle. Lavish definitely isn't the right word to use for my lifestyle but you get my point.

          Others who have been brought up in a more frugal lifestyle are often just as happy because they don't know what they are missing out on I guess. Plus mindset comes into it. More money definitely doesn't always equal more happiness.

        • AlanHB on 25/11/2013 - 13:56
          +1

          Yeah I get your point. If your parents don't cover part of/most of your expenses, you can't continue to live the standard of life that you've created for yourself.

        • Baghern on 25/11/2013 - 14:28
          +1

          50k is understandable, 100k nah.

          I say its understandable as a Sydneysider. Cost of living, rent/mortgages are astronomical for what you get. To get by people are being asked to live like students, while working hard.

          People are struggling when they're paying above 35% of their pay for rent/mortgages. In today's real estate market most of us are.

        • humdingaling on 25/11/2013 - 14:35

          agree
          i dont think i ever heard anyone earning 100k saying they cant afford to move out
          thats not to say people earning 100k can not stay with the folks

        • Baghern on 25/11/2013 - 15:26

          I do… entitled attitude… its okay to have/buy nice things, but its no excuse to buying/moving out

          The excuse always is 'my lifestyle'…

        • humdingaling on 25/11/2013 - 15:39

          insert admiral ackbar meme

        • Dollarsandsense on 25/11/2013 - 22:54

          Completely agree AlanHB. I'm a kiwi and moved to OZ in 2003. One of the culture differences that I noticed when moving over was the number of young people (18-30 y/o) that were working full time and still living at home. I left home just before 18 to go to Uni and never looked back. I grew up faster outside of home and had so many great times that I couldn't put a price on!

          I broke the rule and lived with mates for years. As long as the house is big enough to have your own space it's great to come home to friends everyday.

          In NZ I was told from a very early age that I was only going to be at home until I was 18. It was ingrained in me and I was ecstatic and eager to leave to figure things out for myself. I am now a parent of a small baby and she will need to figure things out for herself too. I guarantee that if you look at it from a financial perspective you are better off leaving home. You will become a stronger person, people will respect you more and in turn you will face better career opportunities. Forget the micro level, look at the bigger picture.

        • AlanHB on 26/11/2013 - 08:07

          ^^^ Looks like we're from similiar backgrounds, I understand that I would have saved up more money if I had stayed at home, but I would not have my sanity or independence and been a weight on my parent's bank balance.

          I will also have to say that the opening statement of this topic:

          "I'm a big boy now and getting sick of mooching off my parents and putting up with their embarrassing antics…"

          Is pretty disgusting. Big boy thinks the people who pay for everything are embarassing.

        • Riczter on 26/11/2013 - 10:54

          They only pay utilities and the occasional home cooked meal, which should be covered by my $400 per month board. Its not that that's embarrassing, its more when they are drunk when I have friends over, and the depressing mood in the household, etc. I don't get how that makes me the bad guy for wanting to move on..?

        • AlanHB on 26/11/2013 - 15:42

          Because it's their house! They have the right to use it however they see fit. They actually have more rights than you, because you do not contribute as much to the financial running of the house.

          Imagine if you were renting a house, and there was a guy who only paid half as much as you for rent, and ate your food, living in the house with you. And that person complains a lot about you having some drinks at home, especially when he has some friends over. Is this the type of person you would like in your house?

          But otherwise, the need to get away from your parents is a good reason to move out. You get to do whatever you want at home, don't have to be around your parents as much and I personally got laid a lot more (which was more important at the time to me than buying a house).

        • Riczter on 26/11/2013 - 16:17

          Haha well yeah that's the thing, I don't complain coz I agree its their house they can do what they like. As an adult if I don't like it I can move out. That's where I'm at. I'm struggling to see where the disagreement is here coz I pretty much agree with everything you are saying except the "is pretty disgusting" part. Anyway, lets stay on topic :)

        • eye on 29/11/2013 - 19:15

          My student budget was
          $120 rent
          $50 food
          $20 transport
          You know the drill. got to cook!!! every drops count.

  • Cheapo333 on 25/11/2013 - 12:32
    +2

    At 50k a year, your after tax income is about 40k.
    If you are living at home with everything paid for you can easily give yourself a decent allowance of say $200/week and still save 30k a year.

    Do this for 3 years and with the 10k you already have, you will have $100k in the bank.

    That's a 20% deposit for a $500k property.

    • Riczter on 25/11/2013 - 13:58

      I dunno about $200 per week, I think I could save 20-25k per year though, that gives me 4-5 years until I have a decent deposit for a home, by which time i also expect to be earning 70-75k per year… But I'll be damned if I'm still gonna be living at home when I'm 28. Sort of a catch 22, i want to save but I don't want it to impact my lifestyle too much :(

      • ilostnemo on 25/11/2013 - 14:28

        All well and good advice except if the house prices go up faster than your savings.

        look at 1996-2006 figures, property prices in perth went up 180%

        • Riczter on 25/11/2013 - 14:31
          +1

          I know we cant predict the future but surely we aren't likely to see the crazy growth that we have seen in the past for a long time, with houses being as unaffordable as they are now. Or am I being totally naiive?

        • Windows7forever on 25/11/2013 - 20:01
          -1

          You're only 23 so don't stress dude. I'm 26 and still living at home and I'm in no hurry to leave. It's an expensive world out there!
          I pay $50 board per week and buy occasional groceries and beer/wine for the house, so that's my contribution.
          The only downside is privacy to do, um "secret things". Maybe you can sneak your gf into your bed late at night when everyone is asleep, that's what I do. Or call her up when everyone is out of the house for some fun. Haven't been caught yet so discretion works. ;)

        • May4th on 27/11/2013 - 13:50

          the housing boom of the 90s isn't going to happen again on such a scale. expect continuous but more moderate growth averaging 4-5% over the next few years would be more realistic

  • berserkk on 25/11/2013 - 12:51
    +7

    All good financial advice above, but if you do want to grow up and learn about responsibility, how to deal with conflict (housemates), laziness (housemates and or yourself), Appreciation for your mum then move out for a while, once you know how hard it is move back with your parents with a greater appreciation for them, save some money
    Then if/ when you get married you Might not treat your partner like your mum with all your learnt appreciation, and responsibility.
    It's not all about finances! Just general advice, not trying to call you specifically lazy, but most of us guys are

  • tsunamisurfer on 25/11/2013 - 14:12
    +2

    Rent is not necessarily dead money, IF, you invest the differential between Renting and Buying wisely.

    The share market has been going gangbusters since the start of the year.

    Renting is only a problem if you do not save and hit retirement, where, one stops working, but still need a place to live.

    By then the rents are probably going to be more expensive than now.

    • Riczter on 25/11/2013 - 14:22

      The share market has been going gangbusters since the start of the year.

      I wish the shares I owned knew this. I had about 8k in shares a few years back, mostly mining/resources, but the market went south. I pulled some out as I needed some cash (only the ones which hadn't dropped too much) but the stuff I'm left with is all about 50-75% down on when I bought it. Quite happy to just let it sit in there in the hope it bounces back. Its worth about 2k at the moment.

      Shook my confidence in the share market a little bit. Still would consider diving back in. What has the market been like since the start of the year in terms of investment returns? 4-6%??? I haven't been following it that closely.

      But if it is that high or more (obviously it depends on how smart your investments are) then it would be a good idea coz money is just stagnating in the bank with interest rates as low as they are.
      Hell, im guessing the real value of my money is actually going DOWN sitting in the bank if inflation is higher than the interest rates right?

      It's a strange world.

      • frinik on 26/11/2013 - 14:44
        +2

        if you invested that 8k into bitcoin youd be a millionaire right now…
        hindsight is a bitch.

        • Baghern on 26/11/2013 - 16:25

          I contemplated at $1…

        • plasmoske on 27/11/2013 - 00:40

          lol lier

        • Baghern on 27/11/2013 - 08:51

          2010/2011… pothead friends discovered the silk…

          It always puzzles me how the media exposes the public to things we know nothing about, we don't need to know.

          I have people at work asking me about the dark internet now. I just say don't go there, I haven't and that's prob a good thing.

        • frinik on 27/11/2013 - 17:00
          +1

          Its got very little to do with the dark net now. Have you looked at the price for a single bitcoin recently?

      • May4th on 27/11/2013 - 13:57

        speculative investors in the sharemarket rarely make money. stats show even professionals like managed fund managers struggle to achieve gains above market average. the average investor should be in it for the long haul and reinvesting any dividend gains. you should have enough liquid assets to let your shares sit when the market is down. even after the crash of GFC shares index shares have went up more than 150% on average compared to its price before the crash.

        assuming you have the right stocks of course, betting on penny stocks is exactly what it is - betting. banks have been doing very well recently but the party will stop eventually

        • Riczter on 27/11/2013 - 14:11

          One thing I heard on talkback radio a while back that made a lot of sense: They tried to implement a mining tax, to tax super profits of the mining companies, why not do the same for banks, coz they seem to be earning ridiculous profits? .. I bet it never happens though.

  • shannonn54 on 25/11/2013 - 14:18
    +7

    @OP
    You don't seem to be able to prioritize. You say your car is crap, needs work; as does your bike. You have two holiday trips within the next 12 months and you want a loan or a good rental accom on top?

    Be realistic. First get rid of the bike, sell for whatever and save the 1000 needed to repair, but channel that savings and sale price into either a replacement car (best option?) or repairing your old car. I'd suggest you 'can' the nz trip as its just a lavish lifestyle choice not a necessity? after Japan and plough that back into the savings.

    Get a savings account that has conditions and penalties for early withdrawal and get the max per week you can budget for, dd to that account from your salary, that way you are forced to save. While your parents may have made some poor financial decisions or had poor financial advisors, I'd ask them for advice and opinions, Parents love being involved and they'll stand by you "more" and give you respect if you really involve them in your decision making process.

    Give up the party animal lifestyle with the trappings (mobiles, o/s trips, perhaps clubbing and bulk alcohol? etc) and start to mature,. Until you are on 100k a year you won't be able to afford the kind of lifestyle you are used to/want as well as a mortgage.

    The problem with good salary earners is they always live to the current salary, that is: get that 25k per yr raise and up goes the luxury items like holidays, 900 dollar mobiles or i-devices, 50k cars on HP etc, it's a trap, the more you have to spend the more you do in most cases.

    You sound like you want to be responsible and independent and good luck to you, however I think you may be unwilling to make the lifestyle changes and accept "boring" to get there.

    A final thought, rather than ruin friendships re renting with mates or a gf, are your siblings old enough (working P/t or F/t) to all move out together , family ties are stronger and you are used to living together.

    I do wish you well and look fwd to future posts on your decisions
    Shannon

    • ilostnemo on 25/11/2013 - 14:37
      +4

      shannonn54, once the op gets a H/L he might not be able to afford holidays,

      being committed to a mortgage isn't that much fun, so if he can go out and have some fun beforehand, go for it.

      Ian Moss once sang "And the money I saved won't buy my youth again"

      If he gets a replacement car, there goes his deposit.

      • Riczter on 25/11/2013 - 14:43

        +1. This sums it up nicely.

        • vicerum on 25/11/2013 - 16:44
          +2

          Don't jump the gun so quickly, just because you've got a home loan doesn't mean you can't take overseas holidays. It just means you're prioritising a holiday rather than a new 60" LCD TV. Rather than spending $50 on beer, you put that $50 towards the new TV instead. Prioritise your purchases in your head, so that "necessary" things come before "luxury" items. Don't even consider a trip to NZ if your car is breaking down, especially considering you need that car to get to work each day.

          I was in a position like you a few years ago where I was able to purchase a property with a large deposit (after working full time for 3-4 years after uni and saving up, while living with parents). For 18 months after I bought the property I continued to live with my parents and rent it out. The rent paid for the interest+principal repayments, and I supplemented the repayments with my income as additional repayments, while any excess savings I ever had remained in the offset account, which further lowered the interest rate.

          I didn't go on holidays (or buy anything really) for those 18 months, but big deal. It sucked for a little while, and I didn't have much privacy or independence, but I managed to slash a huge chuck from my loan, and now I'm living in this house with two housemates, whose rent pays for my mortgage. My own income I can spend how I like, for the most part. Last year I went to Asia in April, then to the US in November. Just don't instantly jump to the conclusion that home loan = prison for life. It's not as bad as people make out, and if things go pear shaped, you could always sell and recoup your investment (assuming you purchased in a decent area and a desirable location).

          You have to be dedicated, committed, and mature with your saving/spending. Be aware that screwing around, getting into credit card debt, wasting money on frivolous crap is ultimately making your end goal (of growing wealth from property) that much more difficult. Be aware of what you want to achieve in these next 5-10 years, and write down the steps you need to take to get there. Oftentimes its as easy as "stop buying useless crap I don't need".

          The only annoying expenses now are constantly climbing electricity and water prices, and various maintenance fees. It's not a big deal though. I suffered for a year and a half, to ultimately be better off. It's a trade-off you should consider.

        • ilostnemo on 25/11/2013 - 17:21
          +1

          The rent paid for the interest+principal repayments, and I supplemented the repayments with my income as additional repayments, while any excess savings I ever had remained in the offset account, which further lowered the interest rate.

          Don't do this,

          With any investment property only pay interest, if you have money left over, buy another investment property. Paying principle on an investment property is just crazy.

        • Windows7forever on 25/11/2013 - 20:07

          Yes, because the interest is tax deductible right?

        • Riczter on 26/11/2013 - 14:08

          This would only be profitable if the value of the house is going up faster than what I am paying in interest on the loan, correct?

        • May4th on 27/11/2013 - 14:04

          unless you live in the house when you buy it for a few months. then you can rent it out for 6 years without incurring capital gains tax while also claiming the rent-interest differential in tax deductions

        • one man clan on 27/11/2013 - 16:08

          You only incur capital gains tax when you dispose of an asset, and you only miss out on incurring it for residences if it's your primary place of residence or it was obtained prior to 1987

        • May4th on 27/11/2013 - 16:27

          you get 6 years if you buy it as a home-owner and then move out - those 6 years which you may rent it out for are exempt from CGT calculation

        • one man clan on 28/11/2013 - 09:56

          Only if you're not living somewhere else you own as your primary place of residence.

    • Riczter on 25/11/2013 - 14:41
      +4

      Shannon, I appreciate your no-nonsense reply, but have issue with most of it. Car is still putting along, but could die at any time. It only cost me 2k and I'm quite happy to run it into the ground before getting a new one for 2-4k. My boss has said I'll get a company car when (if) the company picks up so I'm holding out for that. I'm guessing that's still gonna be 2-4 years away, or possibly never but we'll see. Car with no Air Con is killer in the summer though :(
      I'm not living without my bike. I like my bike. Great way to travel, save on fuel, and I love the feeling of freedom. Plus my mates ride as well. Bike still rides fine but it is an old clunker, when I have spare money I would like to get a newer one. No idea when that will be. But happy with it for now.
      RE Holidays; I know I'm being a bit greedy there, but I have free accomm and cheap flights lined up so can't say no. Plus I'd rather live my life and have fun now, early in life while I can. By the time I'm on 200k I'll have a family and commitments and wont be able to have a holiday with my mates whenever I want :( Much rather live now and party while I'm young and fit and able.

      I'm definitely not ready to 'mature'. I have some great friends and want to take full advantage of that. But I think I am mature enough and smart enough to not fall too far beyond my means. I'd never take a holiday with money that I didn't have for example. Or buy a car on credit etc.

      You are definitely right about people living on their current salary and increasing luxury items as it goes up. But thanks to ozbargain I don't buy extravagantly expensive items unless its at a damn good price. You are also right about me wanting the world but not accepting the lifestyle changes to get there. Eventually I'll have to make some compromises.

      Don't think I could live with my sister, she's too unmotivated. Maybe my brother when he's older and I've taught him some core values.

      I really appreciate everyone's replies. I'm learning a lot, I hope others in the same boat are getting something out of it as well.

      That's what I love about the ozbargain forums. Not just about the bargains ;)

      • RandomNinja on 25/11/2013 - 17:31
        +4

        Much rather live now and party while I'm young and fit and able.

        I strongly disagree with this attitude, but can understand your perspective given your age. I did something similar and wish I could go back and listen to advice from my family (especially the financial planner uncle!). Just know that you will be sacrificing long term for short term - imagine what HALF the $$$ spent on holidays/partying would be worth in 10 years time, especially when you have a family and a mortgage? Overseas destinations and booze will still be there, plus you'll be able to afford better quality of both!

        By the time I'm on 200k

        Not sure if your serious… admire your ambition, but it's dangerous to assume you'll one day make a 200k salary, only a small proportion of Aussie households break through the 200k mark. If you do get there, kudos to you, but in the meantime it would be smart to plan for the worst, hope for the best.

    • wozz on 27/11/2013 - 07:32
      +4

      "The problem with good salary earners is they always live to the current salary, that is: get that 25k per yr raise and up goes the luxury items like holidays, 900 dollar mobiles or i-devices, 50k cars on HP etc, it's a trap, the more you have to spend the more you do in most cases."

      Too true Shannon..

      I got a mortgage when I was on <40k a year.. Still had to listen to idiots on 50-60k whingeing about being unable to afford a house (though they always seemed to have no problem taking out loans for brand new cars etc)

      Can easily do it if you are willing to be smart about money and make saving your #1 priority, don't plan to be spending money on anything not absolutely necessary to live/work.

      my 1.5c worth.

      • Baghern on 27/11/2013 - 08:55

        Easy to say when housing was more affordable.

        People are earning more, but housing prices/apartment prices are forcing people to live in shoeboxes and lfietime mortgages.

        There has been countless times I wish I'd entered the market earlier.

        • wozz on 28/11/2013 - 07:30
          +1

          I kind of think that a lot of people are expecting their first houses to be their ultimate homes.. I just always expected first home to be a small/cheapy thing that can be paid off asap (obviously not in the city.. Though u gotta get used to travel which a lot of people don't want to consider).. than after that look for something a little nicer, if you're lucky have a partner at that time too and can buy something pretty decent jointly

  • AG_ACT on 25/11/2013 - 15:03
    +3

    I'm ready to get flamed, but here is my advice:
    If you live in a city where property prices are generally increasing, buy NOW - something you like, but not too extravagant.

    If you don't get any advantages for being a first home buyer; build, - tou will pay less stamp duty this way.

    If you get first home buyer advantages, or if you can't build, I'd still buy as close to new as possible. (if you pay stamp duty check if you can claim a tax deduction for it). Less maintainence, and more attractive to tenants + greater tax benefits.

    Once built/settled, get a tax depreciation schedule and rent it out. This will give you an idea of all of the unexpected costs of ownership, and will also allow you to save faster. Get an offset account and throw EVERYTHING you have, and I mean EVERYTHING you have at it… you will only be doing this for 11 months if you are a first home buyer or 12 months if you don't get any benefit, so I'm sure you can suck it up….

    Your rent should cover 80-90% of the interest portion of your repayment, and you cover the remainder + save as much as you can. This will give you the following advantages:
    1. You will get to know what it costs to own a house
    2. You will pay virtually no tax on your income for one year…. it might not sound like much, but that's going to double your savings without you even thinking about it.
    3. You will fix your outlay to what you spend today

    edit: should have also mentioned, get a credit card linked to your home loan, and pay it off every month so you save interest on every cent you spend.

    • Riczter on 25/11/2013 - 15:34
      +1

      Possible addendum to your edit: Take advantage of 6 month interest free on balance transfers on new credit cards to further save on loan interest :) http://www.ozbargain.com.au/node/123330

      So many ways to play the system, I love it ;)

      • AG_ACT on 25/11/2013 - 16:08

        Do that too LOL. But afterwards, go back to one that gets paid of automatically each month. Makes life easy, and soon, you stop noticing its a "credit" card.

        • Riczter on 25/11/2013 - 16:19

          Could you not do this with several credit cards? I heard one guy on ozbargain saying he's got 11 or something hahaha

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