When Your Friends Are Buying Houses But You Aren’t
If buying a place in the next few years isn’t realistic for you, there’s no need to resign yourself to a lifetime of renting. There are some practical things you can do now to get your own patch of grass one day.
When a friend has something you don’t – say, their own home – it’s easy to feel a bit jealous. Those years of self-discovery abroad or that pay cut for a job that aligns with your ‘values’ may shape who you are, but being able to afford nice things is, well, nice.
Before questioning the decisions you’ve made in life, remember that every person’s situation is different. Some people can share costs with a partner, get financial help from their parents, or have the benefit of starting their career early. Other people are smart with money.
Here are a few practical ways you can get started on your own journey.
#1 Consider alternatives to buying a home
Want to buy a house but can’t do it on your own? Take a look at Brickx. It’s an online platform where you can buy shares (or ‘bricks’) in properties to profit off rental income and from selling bricks when you’re ready. It’s a way to get involved in the property market without making a full commitment, like buying shares – but in a property instead of companies.
If you have friends or family members who you trust, consider property co-ownership. In doing so, you not only share the financial burden and risk, but also the management that comes with it. Just make sure that you treat this as a business partnership by seeking legal advice and having a binding agreement. No matter how reliable your co-owners may be, any relationship can turn sour if not managed properly so it’s best to be prepared for the worst-case scenario.
#2 Start saving now
Saving may sound conservative and boring, but it doesn’t have to have a huge impact on your lifestyle. An easy win is to set up a separate savings account like an eSaver. If you’re really serious, set up auto-transfer on pay day so some of your salary goes straight into this account and you don’t even miss it.
Also, seeing a financial planner might seem hardcore, but getting professional advice on dry but necessary topics like budgeting, loans and superannuation could be your best idea yet. At the very least, set up an initial no-obligations meeting to see what they can do for you.
#3 Do some research
Buying a home isn’t as simple as rocking up to an auction on a Saturday morning. For this reason, doing research while you’re not quite ready to buy is actually pretty useful.
As well as a mortgage, there’s a bunch of things to think about including paperwork, the area, or the cost of renovations. Getting across all these elements of property ownership means more time to focus on finding the right place when you’re ready and knowing what you need to look out for.
Stay up to date with what’s happening in property by heading to a couple of inspections each quarter, checking auction results on places that interest you, and reading up on regulations and schemes via sites like ASIC’s Moneysmart. Doing so means your life won’t become consumed by the search, but you’ll always have your goals in sight and know what’s happening in the market.
#4 Be prepared to make sacrifices
It might be a blow to the ego to move back to your parents’ place or to a less trendy area, but if these are viable options for you they can help manage the balancing act between short-term wants and long-term goals.
Also consider areas where you can cut expenses now. Maybe it’s bringing lunch rather than buying it, or riding a bike instead of taking the train. Small changes in behaviour will put extra cash in your pocket and create good habits for when you’re paying off a mortgage.
#5 Relax and talk to your friends
It’s good to plan for the future, but don’t overdo it. There’s no point locking yourself in your bedroom and eating ramen for the next five years. Remember that the longer you don’t buy property, the more time you have to save up and decide on what you really want.
You might feel like you’re lagging behind your friends, but having someone around who’s forged what can be a very challenging path is helpful for you. Talk to your friends about their experience – they can provide honest advice on what (and sometimes who) to look out for.
By making the most of the resources and relationships around you, this far-off maybe can become a reality. Enjoy this time you have without a mortgage, because the worst thing you can do is rush into buying property when you’re not actually ready.
Chelsea McIver is a freelance writer and editor based in Melbourne. Her work appears in titles including VICE, Junkee, Broadsheet and The Big Issue. Tweet her @ChelseaMcIver