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One of the biggest challenges for many first home buyers is finding a way to save enough for a deposit.

For those of us who couldn’t wait to leave home and find some freedom – moving back in with parents is not always an appealing option. And if you’re still in your twenties you might not feel ready to sacrifice your social life, and commit to a few years of watching movies on the couch.

Well, it might surprise you to learn that there’s a secret way to save that deposit, live comfortably and still enjoy the odd dinner at a restaurant.

It doesn’t involve moonlighting, or donating your organs on the black market. And it might even allow you to travel a bit, or enjoy a little luxury while you watch your bank balance grow.

So what’s this big secret?

Well, let me ask you a question first. How much do you spend per year on your living expenses right now? Not food, but costs associated with renting your place of residence. The figure should include rent, utilities, internet connection and any maintenance that you’re responsible to pay for.

For most couples, this figure would easily add up to about $25,000 per year.

How quickly could you save a deposit if you didn’t have to pay anything towards your household expenses? Pretty fast – I would imagine. That’s the benefit of house-sitting.

Offering your services as a house-sitter allows you to live comfortably while saving money at the same time. Let’s face it – if you’re looking for a house-sitter, chances are that your house is pretty nice to start with.

You don’t need to charge a fee for this service, because you’re saving tens of thousands just by living in someone’s home and not paying rent and household bills.

You could experience different areas before you commit to buy in a particular suburb or town. This could give you an excellent opportunity to really research your purchase before you jump in head-first with a 30 year mortgage.

Depending on your work situation, you might even be able to do some travelling, and see a bit of the world while you continue to save.

If you’re interested in doing some house-sitting while you save your deposit, there are a couple of websites that you can browse for opportunities:

www.mindahome.com.au

www.aussiehousesitters.com.au

www.houseminders.com.au

This concept isn’t for everyone, and it might not suit those who already have a lot of nice furniture. But if you don’t mind moving around a bit, and perhaps walking a dog or feeding a cat – this could be a great opportunity to save your deposit in no time at all.

The first step in getting a low cost loan is choosing the right type of loan.

There are various types of home loans, all offering different rates and features:

– Honeymoon and Intro Rate loans
– Basic or “No Frills” loans
– Standard Variable rate loans (usually good to avoid these in my opinion)
– Fixed Rate loans
– Equity and Line of Credit Loans
– Offset Home Loans
– Professional and Discount Home Loan packages
– Bridging Loans

For more details read my guide to “Choosing the right loan”: https://www.mortgageaustralia.com.au/email/files/choosingtherightloan.pdf

Sometimes it just makes sense to see if there is a cheaper and better way with your home loan, credit cards, store cards and car loan, in fact any kind of loan really.

And if there is a cheaper and better way, it will be different for each of us, which means it probably won’t be a case of “one size fits all.”

Think of it like this. We all experience events that change our lives but most of us don’t give a second thought to changing the things that help us to enjoy our lives.

So if you’ve changed your work or your income, got married or unmarried, had some kids, bought a car or furniture, been bewildered by the “credit crunch”, simply changed your aspirations or just maxed out your credit card because it was necessary at the time…it’s probably worth checking to see if a restructure of your home loan, car loan and credit cards would make life a little easier and more enjoyable.

That’s where I come in.

It doesn’t cost anything to find out and usually only takes a few minutes to see if a bit of loan restructuring or debt consolidation would be good for you. The least I can do is point you in the right direction and the privacy act ensures our conversation is entirely confidential.

What do you think?

Got to be worth a phone call…

Alternatively, you could even just fill out this form and fax or email it to me and then I’ll get back to you with some ideas.

https://www.mortgageaustralia.com.au/email/files/lifeandfinanceupdate.pdf

First home buyers have a range of different entitlements and concessions they may be eligible for. They differ from state to state, and often are dependent on the value of the home you are buying.

There are also various ways that first home buyers can be helped by family members to get into their first home – not just by lending money towards a deposit – which can possibly save thousands in fees when done the right way.

For more details about the ever changing government incentives, read my guide – “Know your entitlements”: https://www.mortgageaustralia.com.au/email/files/knowyourentitlements.pdf

With many property buyers in hibernation over winter, if you are thinking of selling, the cold weather is your sign that it is a great time to spruce up your property, ready for the spring selling season.

Here are my top tips to prepare:

Make an entrance: First impressions count, so take stock of your front entrance. If your front door is looking tired, replace, repaint or restain it. Similarly, your driveway should be clean and free of cracks. Old concrete driveways can be revived with a resurface and a respray in a new colour or a stencilled pattern.

Make sure your letterbox fits with your home exterior and makes the right statement, either built into a fence or standing on its own.

Get into the garden: Time well spent in the garden over winter will pay off in spades come spring. Take advantage of the cooler weather to clear debris, weeds and overgrown trees and shrubs. It’s also the perfect time to completely overhaul garden beds with new soil and mulch. Draw a rough plan and clip pictures from magazines to create a clear picture of your garden. Take your plan to your local nursery and get expert advice on which plants should go where and how many you actually need. Just make sure the end result is easy to maintain for maximum appeal.

Consider some colour for a warm welcome. The colour yellow has been proven to help sell, so plant or pot marigolds along a walkway or near your front door.

Leave fertilising your lawn until late winter so it’s in tip-top condition when your house hits the market in spring.

Clear out clutter: Make your rooms look larger by putting less in them. Consider replacing multiple pieces of small furniture with one large statement piece. You could also try re-arranging your furniture differently to create the illusion of space.

Brighten your outlook: Clean all your windows inside and out. You will be surprised how much fresher your house looks with sparkling, spotless windows. Make sure you take down and hose all the fly screens while you’re at it!

Deck the deck: Consider adding a deck to create outdoor entertainment space and value. If you already have one, winter is the perfect time to re-oil the surface and railings and replace any worn outdoor furniture.

Spotless surfaces: Wash walls, ceilings, light fittings and ceiling fans to rid them of dust and grime.

Lighten up: Twilight photo shoots and evening open houses are hot selling tools, especially when the weather warms and the days grow longer. Take time over winter to install outdoor lighting that spotlights your front garden and entrance and any outdoor entertaining areas, including the pool.

Detach: It may sound like a strange selling strategy, but consider de-personalising your home. While you still want potential buyers to feel “at home” when they inspect, they don’t necessarily want to see all your family photos on the sideboard and children’s artwork on the fridge. Apart from uncluttering your surfaces and creating clean lines, packing up the family portraits allows buyers to envision their family living there, not yours.

It’s also an opportunity to step back and genuinely appraise your decor and colour scheme. Is your home styled for broad appeal or just for people who share your penchant for peach?

If you find it hard to be impartial, one hour and a couple of hundred dollars spent with a design or colour consultant may be a wise spend. A good consultant will know what trends have market appeal and can share some clever tips on quick fixes and colour schemes. How much of the advice you take is up to you, and you usually have the option to just pay for the consultant’s time and DIY the restyle.

Get energy efficient: With electricity costs on the rise, buyers are on the hunt for energy-efficient homes. Switch to energy-saving light globes and consider a solar-boosted hot water system. While you may not be living there long enough to fully benefit from the savings, buyers are likely to be enticed by the promise of smaller electricity bills.

Freshen up the kitchen and bathroom: You don’t need to completely overhaul tired kitchens and bathrooms for a fresh look. If your fixed appliances – oven, cooktop, rangehood and dishwasher – are older than 10 years, considering upgrading to new ones. Shop around for a package deal on reputable brands.

Add some shine to the bathroom with new basin taps and create a sense of space with a large frameless mirror above the vanity. Upgrade your shower fitting if needed, especially if it has poor pressure. Plenty of buyers will test the shower head during an inspection.

Do you sometimes listen to those seasoned property investors and wonder how they got started?

It’s quite simple actually – they probably started with just one investment property.

Anyone can realise the dream of achieving your financial goals through property investment.

If you’re not sure why you would want to get involved, here are the five best reasons:

1. Financial Independence

Now, more than ever, it’s important to make sure you have steps in place if you want to live comfortably in your retirement. The retirement age seems to be increasing, and people are no longer able to rely on the aged pension as a sole source of income.

If you start now you can build a property investment portfolio that will provide you with financial independence – whatever that means to you.

For some people that means one investment property that provides a rental return. For others, it means building a veritable monopoly of investment properties in an apparent bid to conquer the universe.

2. Take control of your own investments

The great thing about investing in property is that you’re completely in control of what you purchase, and you can take steps to ensure that you give yourself the best chance of achieving excellent capital growth or rental return figures.

The problem with investing in shares and superannuation is that you aren’t able to control fluctuations in the market – your role is very passive.

3. Grow your portfolio as your equity increases

Once you start investing in property, it’s sometimes difficult to stop. One investment starts to grow which allows you to purchase another, and before you know it you have a nice little collection of properties making money for you.

4. Capital Growth

If you choose wisely, you should be able to achieve strong capital growth on your investment properties. The key is to choose the right type of property in the right area. This might not be an area where you would choose to live – it just needs to be an area with lots of potential for growth.

5. Rental Income

If you hope to achieve a good rental income from your investment properties, you should purchase carefully, and keep your ideal tenant in mind. If you like the idea of renting to students, make sure you look in areas near a university or very near to public transport. If you would prefer to rent to a family, schools, shopping centres and parks might be more important.

But decide what’s most important first: capital growth or rental return. You might not always get a great rental return in an area that has a high level of growth.

To find out the latest benefits you are eligible for, visit http://www.firsthome.gov.au/.

If you have any questions or would like some help in obtaining all the benefits you can, I’m here to help.

Have you decided to purchase a new home before your existing home is sold and settled? Bridging finance might be an option for you – but beware – there are some pretty big risks involved.

Bridging finance allows you to purchase a new home while your old home is not yet sold. As the name suggests, this sort of loan will ‘bridge the gap’ between two properties by financing both for a short period of time.

The loan is secured by the old property and the new property, and the rates are similar to normal variable home loans. In the past, bridging finance was more like a personal loan with high interest rates.

This sort of loan is often available with your current lender which is a much easier option than switching the loan to a new lender for a short period of time.

Dangers to be aware of…

Your property might not sell as quickly as you thought, and once your new property settles you will be left trying to cover the cost of a double loan. Obviously this is not ideal, especially if you’re upgrading to a more expensive property. There are plenty of borrowers who have lost the lot or had to borrow from friends and family due to being unable to meet their repayments while they wait for the old home to sell.

Your property might not sell for the price that you imagined, which could leave you further in debt, with less equity in your new property. You probably spoke with a few selling agents about the price that you can expect to see for your home, but the real estate market isn’t always predictable. Sometimes selling agents will give a generous assessment in order to get the listing, and then bring you back down to earth later when you start receiving offers.

You might feel pressured to accept a lower offer than what you could have realistically achieved, because you need to sell your home as soon as possible.

The simple alternative would be to sell your home before you buy another, which will save you from spending more than what you can afford, because you already know how much your selling price will be. In this instance, bridging finance could be a sound option because you know that your property has already sold.

Deposit bonds – the alternative…

Deposit bonds are a guarantee that you will pay the deposit at settlement of the property. The issuer of the bond guarantees that they will pay the vendor the deposit at settlement if you default on the purchase.

They can do this because they will pursue you for the deposit – so if you don’t go through with the sale you will still lose your deposit.

Deposit bonds usually cost about 1% of the deposit amount and can be purchased through most lenders or real estate agents.

These are a great alternative if you want to attend auctions but you don’t have the money in the bank because your property hasn’t settled yet. They are also useful for people who are awaiting settlement on their existing property but the deposit has not been released by the purchaser.