The great Aussie dream of owning your own home seems out of reach for so many, especially those under 30. With rising interest rates, fluctuating property prices, and slow wage growth, young investors can’t help but feel the dream of owning their own home is a myth.
According to a recent survey by Aus Property Professionals, 69% of Australians think the dream is over, and the only way to get into the market is with the help of the bank of parents.
But property investor and advisor Colin Lee, from Inspire Realty, believes anyone can enter the property if they take these five steps.
“While it is more challenging to invest now because of external factors, property ownership is achievable, and it should start way before you start saving for a deposit,” Coilin said. “It all starts with knowledge in people’s pursuit of creating financial security.”
“I remember as a young man, my mother encouraged me to invest the $25,000 I had saved from working four jobs. It was the best thing my mum did for me, and it is why I want to inspire other young people to get into the property market.”
“Gen Z and Millennials will find it harder to get into the market. Property is not going to get cheaper and there will always be economic factors that get in the way, but understanding the market and why you want to invest is a good first step.”
Colin says the first step to entering the market is to understand the true purpose of why you invest in property. “You need to understand why you’re doing this is financial freedom. Is it to spend more time with the kids? What is your dream? What will drive you to build financial freedom,” he said.
The next step is to know the right platform for your investment journey.
“Too many people don’t understand the implications of choosing the right platform you can invest in. There are generally different platforms you can invest in. You can do it through your personal or individual name, through your company, through a trust, or self-managed Super Fund,” Colin said.
“Many young people go into property without any thought about asset protection. When you are not sure what you are doing or understand the pros and cons and implications of your investment structure, mistakes can be made.
“People buy property in the wrong entity in their personal name and that is a real big booboo because you don’t want to expose yourself in the market. Knowledge is power.”
The next step is to have a plan.
“That good old saying ‘if you don’t plan, then you plan to fail’ rings true in the property investment space,” Colin said. “So many start this journey, driven by urgency, without a plan or knowing where they want to be in 10, 20, 30 years.
“The best plan is to work backwards. Know how much passive income you need to live comfortably, and then you know how many properties you need to get yourself there and how much you will need to invest to get there.”
The next step is to know your numbers. Colin suggests speaking to a broker or buyer’s agent to get insight into how much you will need to enter the market.
“It is getting harder and harder to save for a deposit, but it can be done. For younger people, understanding the loan to value ratio. By understanding your cash position and how to manage the repayments, it is a good foundational knowledge to have,”
The final step is to have the right team to work with.
“Property investment isn’t something you play with. You have to have a robust plan and a great team around you to help navigate the property space. Working with property advisors who have experience with investing will help guide you through the ins and outs of investing,” Colin said.
“If you are going to climb Mt Everest, you do not want to get just any old sherpa. You need one that understands and has deep knowledge of all that can do wrong. So your property investment team are the best brokers, solicitors, accountants, property managers, conveyancers, surveyors. and buyer’s agents available.
“These are the people who can facility the property purchase, and by developing good relationships with your team, it means they will have your back. These are the people who live and breathe property and can guide a young person to financial security.”
