How some Millennials are buying property without help

Young people share their tips regarding how to get into the property market when you haven't got assistance.

When Adil Mohiuddin asked his girlfriend Kirti Mahraj what she wanted for her 22nd birthday in early 2015, she casually replied that she wanted a house.

Most people in their early 20s would smile at the comment and move on, but Sydney-based Mohiuddin made it his mission to get his girlfriend what she wanted.

By the time October 2016 rolled around, Mohiuddin and Mahraj, now 25 and 23, had become joint owners of a large house in the newly created suburb of Jordan Springs.

The street they live on is yet to appear on Google Maps, so even finding your way to their house is complicated. But that hasn't stopped a number of families and young people buying their own plot of land in the suburb. In fact, Jordan Springs was named as Australia's best selling residential project in 2014.

Before buying the land, Mohiuddin drove around the suburb and says he fell in love with it.

"It had a nice feel to it. I also liked how it was close to Penrith CBD," he says.

Buying a home without family money seems like a pipedream for many young people especially in Sydney and Melbourne, and the numbers of first-home buyers have been falling in recent years.

So how do young people like Mohiuddin and Mahraj make the dream a reality?

"I didn't have plans to own property once I left uni," Mohiuddin says. "But after I started doing well at my sales job I thought before I foolishly go waste this money elsewhere I'd better put it to good use."

Mahraj, who works as a technical officer for a security firm, agrees that it's best to invest your money wisely.

"So many young people waste their money on partying and other things. We live in a society where if you work hard you can get a good job and make good money. The property crisis is just going to get worse, so better get your foot on the ladder now while you're young," she says.

Mohiuddin took advice from his father who had worked as a bank teller for many years.

"I found out from him the kind of loan I could get and the monthly repayments I would have to make. I then started doing research into the kind of areas I could buy a place," he says.

Research is vital when looking for your first home.

Zain Zama, 23, who works for a finance firm and runs the Young Property Investor website on the side, says young people should familiarise themselves with the ins and outs of buying property before they start house hunting in earnest.

"Get to know the free online resources such as Domain and other property websites," Zama says.

"And then get yourself out there, meeting real estate agents, and other property professionals. Go to open homes and see how buying a property works. Go to the bank that you've always been banking with, have a conversation with them and ask all the questions that are in your head, no matter how stupid they seem. And then go on to the next bank and the next bank. Understand the process of home ownership. All this information is free."

Zama bought his first property when he was 19 years old and working in retail. He lets it as an investment property and rents his home.

Zama believes people get too hung up on the area in which they want to buy. "If you're fixated on an area then you need to do whatever you can to buy there. That may involve saving more and increasing your income. But it's best to not be too romantic about where you can own a home."

Zama suggests setting your maximum budget (say $700,000) and then searching for property under that amount. "Find out what's at your price range and then start filtering away to get to the best compromise," he says.

For Alex Heneberry, 25, on the other hand, being picky about the suburb is important for the resale value of the property.

Heneberry bought his first house in the Sydney suburb of Colyton at the age of 20. He was doing an apprenticeship in building when his boss advised him that rather than spend all his money on buying and doing up cars, he buy property instead. Alex took his boss's advice. He sold his car and put the money towards the deposit for his first property. He now owns a property portfolio that has him on track to be semi-retired by the time he's 30.

Heneberry believes young people have time and the ability to take risks on their side. "If you don't have dependents and are living at home it's easier to take risks," he says.

Of course that doesn't make buying property any less intimidating. "The first property purchase I made was terrifying. I was worried I wouldn't be able to make the repayments and the property would sink. It's scary to have a big mortgage in your bank account. But somehow you have to find a way to let go of the fear and throw yourself in the deep end. In the end, a lot of my fears were unfounded."

He advises young people to get over the fear of buying a property. "Do your research, don't be afraid to take risks and get the right people on your side."

All three of these young people have managed to overcome the odds to buy property in a housing market that ranks as one of the most expensive in the world. It hasn't been easy, and all three have worked hard to get where they are. But of course owning a property isn't the be all and end all.

As Zama puts it, "owning a home doesn't mean you've got your life sorted or you've made it. It just means you've put aside a significant amount of your capital on an idea that you're hoping will bring you a return on investment."


This article was originally published by The Age on 21 December 2016. It represents the views of the author only and does not necessarily reflect the views of AMP.

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© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.