If Einstein were alive today, even he would have difficulty answering the modern dilemma. The question that faces all young professionals in the modern world; “how do I own my own property?”
In theory, the answer to this question is simple, and is nothing more than a 3-list guide:
- Save a deposit (a minimum of 10% of the property value)
- Prove to the bank you can afford to pay your mortgage (6 months wages should do it)
- Find a house or apartment
But that is not the problem. Most people know what we need to do, but in the current climate, how exactly are we supposed to do this? With a record level of sky-high rent prices and extremely high job competition, what direction do you take so that you can find that first step on the ladder?
So what’s the problem with renting? Well, it’s a great short-term option, yes, and the process is often quicker than buying your own property, but it is NOT an investment. The money that you spend on rent disappears into a seemingly bottomless pit, never to be seen again! Property investment, however, guarantees you a return on the money which you put in. The property becomes yours, and you can sell it on (to see a return of the money you invested) or just pay off your mortgage, leaving you with only living costs to account for!
Investing in property can be a very confusing time, as there are so many different routes to owning your own home that it can seem like a bit of a minefield! Take your time, and seek the relevant legal advice. But why should you act now? Well, simply, the longer that you take to acquire your own property, the longer you will be wasting your money on rent (money that could be better spent paying off your mortgage or making improvements to your new home). If possible, move in with friends or family to reduce your outgoing expenditure, so that you can save your deposit more quickly and finally own that dream home!
But there must be some downsides? Renting must hold some advantage? Well, the only minimal advantage that renting holds is that any problems with your property are not your worry or responsibility to pay for. This fear can put off many first-time buyers. Realistically, however, apart from the odd cosmetic issue (paintwork, redecorating, etc.), how many HUGE problems have you encountered while you have been renting (such as burst water pipes or boiler failures?). Yes, they are very expensive, but the reason for this is that they are very rare.
And it’s not just the deposit that you need to save for. Don’t forget to prepare to have enough money aside for the following:
- Solicitor and valuation fees
- Stamp Duty
- Money for any cosmetic or structural work
- Moving costs (paying for a removal company, etc.)
Yes, it can be daunting, but property investment is a means of guaranteeing financial independence in a very difficult economic climate, and there are very few feelings that compare to the sheer joy of owning the keys to your very own home!