Struggling To Get On The Property Ladder? 4 Alternative Ways To Home Ownership
For many New Zealanders owning your own home is the ultimate dream. However, for some potential home owners it can feel like it will only ever be a dream. With large deposits needed, rising house prices it can seem practically impossible to get into the property market.
When getting on the property ladder presents you with challenges, sometimes you've go to think outside the box to make home ownership your reality.
Here's four alternative ways to get on the property ladder when home ownership seems like a distant dream.
Maybe you can't afford to buy in the area you wish to live in but for various reasons you're not going to give up on your dream to live in a certain suburb. Perhaps the school zoning is important for you, commute to work is favourable, or you need to be close by to support a family member.
Rentvesting maybe an option worth considering.
A rentvester is a home buyer who chooses to rent in the area they wish to live & at the same time buys an investment property in a more affordable area.
Rentvesting isn't for everyone as it can impact on things like your eligibility for 1st Home Buyer packages, & the amount you can borrow, so we strongly recommend you get professional advice & speak with us if you're considering this option.
2. Start with a 'starter' home
Be realistic, how many people do you know whose 1st home is their forever home? Years ago you could probably name a few, but now it's not uncommon for someone to own upwards of 3-4 homes in their lifetime.
A 'starter' home is a good way to get into the property market. The idea is you choose a place you'd be happy to live in for a couple of years, build up some equity, take advantage of the current low interest rate environment & maybe add some value to the home so further down the track (typically 2-5years) you can move to something more suited to your longer term needs.
3. Shared ownership
This option has definitely become more popular over recent years, with siblings, family & friends choosing to buy together. Of course, like any joint ownership ventures there are many things to consider with shared ownership. You want to make sure at the outset everyone's interests are protected to ensure things go smoothly right from the get go. So legal & financial advice is definitely a must in this situation.
4. Parent as guarantor
Having a parent as guarantor for your lending is one way the 'Bank of Mum or Dad' can get you into your 1st home. This isn't the only way they can help take a look HERE for other options.
If you do go down the guarantor track this means your guarantor will allow equity in their own property to be used as additional security for your loans & should you default on your home loan they will also be liable in helping to repay the debt.
The best thing you can do NOw...
Everyone's situation is different & deciding the best way for you to get onto the property ladder isn't always straight forward. This is why we always recommend talking to a mortgage broker as soon as you've made the decision that having your own home is a priority - even if you don't have your deposit sorted yet. As we can advise you on the quickest & most suitable way to get into a home for your unique situation.
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Brent 0800 334 338 or firstname.lastname@example.org