Getting Into Property – An Alternative Approach
There has been much media comment lately about the Australian property market, much of it focused on the high prices being paid, especially in Sydney and Melbourne. This media conversation is bemoaning the likelihood that young Australians will never own their own homes like their parents did, and that they are being priced out of the market by investors.
Property Opportunities Available Outside Sydney and Melbourne
Like all such conversations it has some merit, but it is also ignoring the huge diversity of property available in Australia. It also concentrates its argument in two relatively small geographical locations, albeit those containing a significant proportion of our total population. In our other capital cities and large regional centres, properties are being snapped up by first home buyers and investors at reasonable prices.
How do we know this? We are the Fountain Property Group, a one stop solution for people interested in building an investment portfolio. Over the years we have been in business, we have heard many reasons why people think they can’t buy a home. With the right advice, these reasons can all be overcome.
Stable Income and Savings History a Good Start
The first issue is, naturally enough, having a sufficient and stable income that would give a lending institution the confidence to approve a home loan. The next factor is having a reasonable deposit firstly to avoid paying mortgage insurance, and also to demonstrate your ability to maintain a regular savings pattern over time.
Could Tenants in Common be the Answer?
Both these considerations apply equally to an owner-occupier, or to someone interested in purchasing an investment property. Another way to mitigate the risk, should something unexpected happen, is to purchase property with two or more other stakeholders under a legal structure called tenants in common.
If each party contributes an equal amount they become tenants in common in equal shares. If one or more parties contribute a larger or smaller share, they become tenants in common with shares in proportion to their contribution. There are some other issues that need to be discussed, but this is a viable way for people to purchase a home, particularly an investment property.
Good Properties at Affordable Prices in Regional Centres
The other factor that many people do not consider is the location where they want to buy. If it is for a home to live in, obviously that must be near employment. If, however, they are starting a property portfolio, there are many locations throughout the country, other than the capital cities, where they can get started. Wherever there is a demand by tenants for housing, there is opportunity for investors.
This, and other advice such as ownership structures, cash flow and management, is available to our clients at the Fountain Property Group. Anyone with a reasonable debt history and regular income can own property.