Help! I Can’t Get on the Property Ladder

Superman is the only person I know that can leap tall buildings in a single bound.  The rest of us mere mortals have to step up the so-called property ladder one rung at a time.  And like all real ladders the safest and surest way is to start at the bottom.  Trying to leap too many rungs will only end in tears.

You want to get ahead through property?  Firstly, congratulations for making the bold decision to get on and journey up the ladder.  It might seem daunting but with motivation, planning and patience it will happen. Granted, the new Loan to Value Ratio and lower supply volumes are encouraging us to think outside the box.

For most of us the days are gone when we can afford to service and reduce a huge, long-term mortgage for the house of our dreams without compromising our lifestyle. We need to challenge the way we think.  Instead of wanting it all and wanting it now we need to work our way up to our goals -- smart goals; the smart way.

Acquiring the deposit is probably your all-consuming thought.  A dedicated savings plan is the first step, whether it is formal and structured similar to a Kiwisaver scheme or something you organise and commit to yourself with the help of your bank.  Either way it has got to be thought of as compulsory. As a couple, given two-five years you should have a healthy balance.

Combine this with other money saving actions, for example, can you take in a boarder, share accommodation, work extra hours or budget more wisely? It might sound boring and unattractive but two-five years will fly by.  Remember you have a smart goal.

While you’re doing this, workout where you want to buy, what type of home you want and how much you can afford.  Often the first property you buy will not be the only property you buy.  If you happen to live in an expensive suburb think about starting off in a more affordable area.  Perhaps you could rent the new property out making enough to cover expenses and holding on to it for a few years to take advantage of any capital gain.

Have you considered partnering with friends or family to purchase a property?  Four incomes are better than two to blast away at the mortgage faster than a speeding bullet. Think machine gun approach.  Of course, you should consult a lawyer and possibly an accountant to ensure you are protected from unforeseen eventualities.

Do yourself a favour, invest in yourself.  Think smart goals, smart ways. Before you know it you’ll be wondering how to get on the next rung of the ladder . . . and you’re on your way to becoming a property superhero!