So you’ve decided to buy property – on your own. It might feel lonely but take heart; you’re actually in good company.
According to the Australian Bureau of Statistics, around 22% – or almost a quarter – of first-time buyers with a mortgage were single person households.
And the figure is likely to rise as the number of single person households (whether owned or rented) keeps rising in line with the current trend towards shrinking households.
We spoke to some property buyers who’ve already gone it alone and asked their advice on making this big solo step onto the property ladder.
8 tips for solo buying
Here are eight tips for going solo in the property market.
1. Do your numbers
Christine bought a two-bedroom apartment in Canberra in 2012 and recommends thorough research before buying – into your own circumstances and budget, as well as the property market.
Research before buying – into your own circumstances and budget, and the property market.
Christine was sick of renting and wanted to live by herself, so buying was the right choice. She had saved a deposit and realised that the repayments for an apartment were similar to the rent on a one-bedroom apartment.
Research showed her the local Canberra market had been softening. “It was actually easier and less competitive looking for a place, compared to a few years ago when I first thought about buying,” Christine says.
2. Be prepared to compromise
All buyers have to compromise, not just those who go it alone. As Christine says, you need to be realistic. “I wanted to live close to the city so an apartment was the only affordable option for me to purchase on my own,” she says.
Buying on your own generally limits what you can afford to buy, and obviously you don’t have anyone else to help with the deposit or mortgage repayments. But there are still clear benefits.
“I wanted to buy somewhere myself so that I had an asset of my own, which would help provide longer term financial sustainability regardless of what happened to my relationship status,” Christine says. “It also meant that I didn’t have to negotiate with someone else over which place to buy.”
3. Think outside the square
Just because you buy a property, and get on the property ladder, doesn’t mean you have to live in it.
Just because you buy a property doesn’t mean you have to live in it.
“If you can’t afford to buy a property to live in, look at the affordability of an investment unit,” says Melissa from Sydney’s Lane Cove, who bought her first investment property while still living at home with her mum and dad many years ago.
“When looking for an investment, think head over heart and try not to be emotional about attributes that bother you but wouldn’t bother a tenant.”
4. Prepare for the worst case scenario
Do your maths carefully, and then do it again factoring in the worst possible scenarios that could eventuate, says Kate, who owns two properties on her own in Canberra. Interest rates could rise, you could lose your job or become unable to work, or property prices could drop.
“The worst probably won’t happen,” Kate says. “But knowing you’ve thought about how you’ll manage if it does, makes it easier to sign on for that much debt with just you”.
5. Be your own advocate
Kate says she initially feared being a solo buyer might make it difficult to get agents to talk to her or or treat her as a competitive buyer, but she never encountered problems.
“It probably helped that I had a clear idea of what I wanted and was willing to get into negotiations,” Kate says.
It probably helped that I had a clear idea of what I wanted.
Buying property is a big investment, and at some point you will have to negotiate, or bid at auction. Being well informed and willing to do it alone (or have help at hand if you’re not) is key.
6. Seek advice
“Almost everyone who’s been through this before will have come across a snag or two,” says Kate. “So why not benefit from this to try to avoid the same traps yourself?”
So if there is anything at all tricky about your set-up, if you don’t have all your deposit in cash and a job with a completely fixed salary income, then seek expert advice from a good financial adviser or broker, Kate advises. This could include using share or investment equity to offset your deposit, working as a small business or contractor or in an unconventional field, or needing to factor in a family trust or odd investment income.
If there is anything at all tricky about your set-up, seek expert help from an adviser.
But even if the money side of things is straightforward you could still benefit from talking to people and seeking their advice. Kate says a pointer from a colleague led her to her first bank with a very low rate and no fees, something that made all the difference when she needed every cent.
7. Take a long-term view
Rob, who bought in Sydney’s Bondi Junction nine years ago, says there are two different things when you buy property: the buying and the owning.
“A property isn’t just an asset, it’s a thing you live in,” says Rob. “And things can go wrong with the thing you live in. So if you buy, for instance, an 1890s terrace, ask yourself how capable you are of fixing things around the house? And if you’re not, how ready are you to burn money on handymen popping in to do quick fix up jobs … like, always? As one handyman told me, ‘These old places, you’ve got to love them to like them’.”
If you buy an 1890s terrace, ask yourself how capable you are of fixing things around the house?
Luckily Rob loves his place, but budgeting for the costs associated with ownership as a solo buyer are just as important as budgeting for the costs of buying the property in the first place. Things like strata fees, rates, upgrades, insurance, and unplanned maintenance.
A long term, measured view of the costs is essential with any property purchase, but perhaps even more so if there’s only one bread-winner.
8. Use your friends and family
The routine of endless open homes can be relentless, and Kate recommends taking a friend or family member to open homes for a second opinion and to auctions for moral support.
“When I found somewhere I liked I would always try to rope a friend or family member into coming along to that property and giving me an honest opinion or a sanity check,” Kate says.
“Talk to them beforehand about what you want to spend, and how much you can stretch to afford to spend, and then remember those numbers when the bidding starts,” Kate says.
“This goes both ways – if you pay more than you can afford, it will be messy, but if you get thrown by the auction process and miss out because you don’t bid up to your fair price then you’ll probably be kicking yourself tomorrow”.
Taking a friend means also that if you win the auction you’ve got someone to celebrate with. And if you’re outbid on auction day you’ll have someone to commiserate with.
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