How to purchase a home in the next few years.

You want to buy your first house. ?While interest rates are at an all-time low, house prices in Brisbane are at an all-time high. ?The good news is it’s not impossible to buy, but you’ll probably have to change the way you think about your budget and the type of property you’re hoping to buy.?

Seven Simple Steps:

1.??????Scrutinise your budget

Nobody likes to budget, but it is critical if you’re serious about financial fitness to purchase a home. ?Find a budgeting method that works for you, this could be a budgeting app on your phone or a simple Excel spreadsheet.

Regardless of the method you choose, at minimum be sure to note down how much you’re spending on the following items:

???Necessary expenses (such as rent, utility bills, groceries, medical expenses, vehicle, and internet)

???Choice expenses (such as fitness memberships, non-essential health, subscription services, and clothing)

???Luxury expenses (such as dining out, food delivery services, holidays)

2.??????Reduce debt

If you’ve credit cards, personal loans, or AfterPay, set yourself a realistic goal to get these paid off quickly.?Lenders don’t look favourably on a high debt-to-income ratio, as this is where a lot of your income is absorbed each month.

3.??????Reduce spending

Take a look at your choice and luxury expenditure that you noted down when doing your budget. ?Is there something you could live without if it meant owning your own home in the next 3-5 years?

4.??????Prioritise savings

You’ve set a savings goal, now you have to stick to it. ?Imagine that you already had a mortgage and save any extra on top of your rent that you would spend on a mortgage. ?Whatever savings method you choose, find one that you can stick to.

5.??????Make a plan

Now that you know how you’re spending your money, it’s time to make a plan. ?Work out how much you can afford to spend on a house by working out your borrowing power.

Don’t be disheartened if you can’t borrow as much as you were expecting. ?You’ve got 3-5 years to improve this figure!

The next step is to work out your saving goal to get you there. ?While you’re working this out, it’s a great time to decide what time of year might be best for you to buy.

6.??????Be disciplined

It’s important to find a way to stick to your budget. ?Here are my best tips:

???Set specific goals to help you stay disciplined. Instead of “I’m going to buy my first home”, try “I’m going to buy my first home in March 2024”

???Try setting micro-goals that will get you to your ultimate goal. These could include a daily, weekly, or monthly spending limit or savings goal

???Have a separate savings account for your deposit so you can watch your deposit grow.?Better yet, use an account that rewards you for not dipping into your savings, or utilise a term deposit.

7.??????Research what and where you want to buy

If your borrowing power was lower than you expected, it’s time to think outside the box with regards to the location and type of property.

Do you want a new build or something that needs renovating? ?Write down a list of your non-negotiables. ?Consider suburbs you’ve never heard of or up and coming suburbs that will have potential 5-10 years from now.?

Over the next few years keep an eye on progress and activity in the suburbs you’re interested in. ?At what rate are property values increasing? ?Is the area earmarked for any infrastructure projects? ?Are developers buying in the area? ?Keep up to date and be prepared to change your plan with the changing property market.?

The key to buying a home in the next few years is being realistic. ?Accept now that you might not be moving into your dream house or your favourite suburb. ?Be realistic with your budget and savings goals. ?It may not be easy, but it is still possible for you to become a homeowner.

Ryan Barabas of Elever Property Group is a leading professional in the Brisbane Property Market. For assistance with any matters regarding your property, do not hesitate to contact Ryan on 0439 715 742.?