Property ladder: Thinking outside the box
The great Kiwi property ladder
Renting does have its advantages when you are at the stage of life where you build a career and move around a bit due to your job. That would be the only advantage of renting.
Being a renter is the most humbling experience I have had. Every three months I get a property manager come and inspect our home. They do not ask if the time suits, they send an email and expect you to be available. Rent is increased as soon as allowed and if you do not like it, you have to move on.
We have been saving as fast as we can so we can buy, but we now know we cannot afford to buy in the city we live in. So we are looking to buy a home in a city that a house is more affordable so we can build up equity.
We are renting a house for $500 a week and are moving to a smaller, less comfortable place where the rent is $400 a week and the difference is being used to add to a deposit.
Also, for the next two years we will be paying $100 a week off the mortgage after we buy. The property we have found is large enough that we can add another house on the back so we can increase value and rental income. By doing this we should be able to sell in three to four years and buy a property in the city we live in or we can keep the homes and remortgage to buy.
The reason I am telling you this is it that it's all about choices, and lowering expectations.
We are doing this as a family on one average income, under $70,000 with four kids. We choose to have four kids and by buying a home like this rather than continUing to rent gives future choices for our children.
It is not easy. I cannot remember the last time my wife and I ate out but that does not matter because our kids need a home.
I hope what we are doing may help someone else to think outside the box.
* The author's name has been withheld due to the personal financial information disclosed.
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