I know what you’re thinking – “Don’t you have to be earning six figures to be able to afford to buy a house in Sydney? Not everyone is a hot-shot lawyer, Andrew! I’m as middle class as the next Opal Card-wielding professional!”
And to that I say, yes, it’s true that CoreLogic RP Data reported a need for an annual salary of $115,000 per annum to avoid mortgage stress.
But here’s the thing about buying a home on a single income…it is actually possible.
If you learn to manage your debt.
If you know how to improve your credit rating.
And if you know where to buy in Sydney.
I’ve written about these topics before, but in this particular post, I wanted to take the time to address the concerns of those wanting to buy a home on a single income.
It’s easy to get dissuaded by all of your coupled-up friends who are happily furnishing the house of their dreams on a double income. Those happy schmucks.
But you’re smart, and if you’re looking to buy a home on your own, you likely have serious chutzpah. So kudos to you.
This post is by no means extensive, and I encourage you to check out the rest of my posts to better educate yourself about mortgages and the Sydney property market.
But if you’re single, want to find your own abode, and live in Australia, these tips were created with you in mind.
Go west for best prices
I’ve mentioned the best suburbs to buy in Sydney, and it’s a must-read if you haven’t got to it already. As you can see in the post, places like Penrith and Thornleigh should be high on your radar. They’re far more affordable than inner city Sydney houses for sale. And if you’re wanting to enter the Sydney property market sooner rather than later, a house in Blacktown will set you back by $450,000.
Invest in Sydney real estate
If you’re young and still enjoying all of the entertainment our thriving city has to offer, then you likely scoffed at the last point. And fair enough – it takes 45 mins via train to get from Blacktown to Town Hall, and you might want to be closer to the beach or to work. If living out in Sydney’s west doesn’t suit your FOMO mentality, then consider your property purchase an investment.
But I have to warn you – the mentality for buying an investment property is dramatically different from buying a home you want to actually live in. You’ll need to think about your renters, and not what you want. But because you’re buying on your own, you’ll get to be the one making all of the decisions. Couples might get to combine savings, but they’re the ones who usually take their time in making a mutual decision.
But that’s a topic for another post.
Improve your financial fitness
Do you start saving for a mortgage to buy a home in Sydney, or pay off all of your debts first? I can unequivocally and whole-heartedly say that paying off your debt and improving your credit rating should be your number one step.
You’ll need to assess the state of your debt, commit to credit abstinence, shape up your day-to-day spending routine, and learn to pay all of your bills on time.
That sounds like quite a bit to do, right?
Read this post over here. It’s full of practical, everyday examples to help you flex your money muscles.
Get a guarantor
If you want to enjoy all of the freedom, comfort and joy that owning your own home can bring, and you’re dedicated to doing it alone…consider not doing it alone. Well, not completely anyway.
If you’re having trouble saving the minimum 10% for your home loan deposit, you’ll be pleased to know that no deposit doesn’t mean no home loan. This is where a guarantor steps in, and metaphorically says, “I’ve got your back”. In a nutshell, they put property up as collateral in your mortgage application. They’re your mortgage angel and get you out hefty Lender’s Mortgage Insurance (LMI), and you need to thank them buy paying your mortgage on time.
Interested in finding out more? My post on mortgage guarantors explains it all.
As you can see, buying a home on a single income isn’t impossible. But with financial knowledge, and a great Sydney mortgage broker on your side, owning the home of your dreams doesn’t have to be a Pinterest board.