READER REPORT:

Time to look at buying

GAVIN MCKENZIE
Last updated 05:00 07/06/2014

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Many people think making money on property means having multiple properties, or buying do-uppers and flipping them on.

But often, simply buying a first home and living in it is actually a money-making move.

If the rent you were paying to your landlord is the same as the interest you will pay to the bank, then it's probably time to look at buying.

Much of it comes down to personal circumstances and the local property market, situations certainly vary across the country.

It's easy to get off-put by all the negative headlines about soaring property prices, rising interest rates, predictions of crashes, doom and gloom etc.

If you haven't done it before, sit down and work through the numbers. You might be surprised.

The first step is to get a grasp on your finances - income, expenses, savings. Also get an idea of home-owner expenses - rates, maintenance, insurance - as you will need to factor those in.

It pays to think outside the box too. You could go for a larger house, and get a flatmate or two. Or perhaps work with family or a close friend and go halves - pay it off twice as fast.

Put the numbers into a spreadsheet or an online calculator - a good one is www.thatsalotofmoney.com.

If the interest going to the bank is similar to your current rent and you have enough leftover to chip away at the loan, then you're looking good.

You might not be making money yet, but you've taken your first step.

Or perhaps the interest works out to be less, in which case you will actually be making money!


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