Singing a duet, getting a hug, playing Marco Polo... there's just some things you can't do alone. Buying a home, however, is one of those things that doesn't necessarily require two people.
It's the Australian dream to own your own piece of real estate in any of the nation's capital cities, but it seems like everywhere you go, everyone from the media to your well-meaning friends are telling you that it can't be done solo. Unless you have a high income or have inherited a large sum of money, it's a pipe dream for most of us... or is it?
Apart from Adelaide and Hobart, where average income earners can buy a median-priced house on their own, singles who want to get into the property market in any of the other six capital cities in Australia would have been told time and time again that it's just not possible without the assistance of a partner. However, there are a few actionable things you can do to get onto the property ladder sooner.
- Consider 'rentvesting.'
Just because you buy a property, it doesn't mean you have to live in it right now. The latest buzzword in the real estate world, 'rentvesting' involves allowing renters to cover the cost of your mortgage repayments, while you relax inside a different rental that you call home. It's on the rise, for more reasons than one.
- Find another source of income
Going into a home loan single can be daunting, especially when it's such a huge financial investment. In addition to the actual price of your home, you will have to pay the stamp duty, insurance, and a myriad of other expenses. Having a partner's second income would make all these payments more bearable, but when you don't have that luxury, you might want to consider getting a second job to secure another source of income to help meet these expenses.
- Be realistic
Do you want to live close to the city? Then an apartment might be the only affordable option for you. It's important to compromise, just like all buyers have to do. Going solo on a property may limit what you can afford to buy, but you could end up with an asset that can provide longer-term financial sustainability for if and when you do meet someone in the future.
- Speak to a mortgage broker
Banks aren't allowed to discriminate based on marital status, but singles only have their own income to qualify for a home loan. This means there are tighter lending standards due to factors being taken into account, such as having a high debt-to-income ratio or whether you live with a dependent. However, by speaking with a local mortgage broker, they can tap into other lenders and resources that you may not have access to, helping you find a better decision.
KEY TAKEAWAYS: Don't let your single status stop you from owning your own home. There are many ways to get onto the property ladder, including rentvesting, finding another source of income, being realistic, and speaking to a mortgage broker.
Disclaimer: The advice provided in this article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. We encourage you to consult a finance professional before acting on any advice provided in this article or on this website.