Cheaper ways to get into the property market
Not everyone has help from the bank of mum and dad or a six figure salary behind them. So, how can the rest of us afford a home?
- Rentvesting
It isn’t only wealthy old people that can invest in property, rentvesting allows buyers within all price ranges to purchase a home in one area, rent it out to tenants and then live somewhere else. Is this option right for you?
Pros of rentvesting
Not only can you live where you want with rentvesting, but you can also invest in something that is perhaps cheaper, may provide a better rental yield or achieve better capital growth over time.
- Buy an apartment instead of a house
An apartment in an inner city area is often a more affordable option for buyers. See more: Apartments For Sale
It’s no surprise that in all of our capital cities, homes on the fringe are cheaper than those in inner city locations. While you might begin house hunting in one suburb, be prepared to expand your radius a little further and consider suburbs that weren’t originally on your list.
Another more affordable option could be to consider an apartment instead of a house. Remember that the first property you buy doesn’t need to be your forever home.
Pros of buying an apartment instead of a house
An apartment or even a townhouse in middle- and outer-ring suburbs are almost always cheaper than a house in the same area.
What you lack in space, can frequently be made up for by either lower mortgage repayments or by buying in a more desirable location.
Cons of buying an apartment instead of a house
There is almost always a trade-off between location and the size of a property.
Apartments and townhouses are smaller than houses and often have no backyard or just a small outdoor area. Can you live with the smaller space?
- Move to a regional area
Living in a regional town can often be far cheaper than living in a capital city and those lower costs don’t just relate to housing. Often the cost of living in a rural area can be cheaper than the city.
Pros of making a tree change
Regional areas within commuting distance to a capital city are generally in higher demand than more remote locations.
Often it might mean a longer train ride or drive into work, but a bigger house and more space outside. The more relaxed lifestyle in these areas is another thing buyers find attractive.
Cons of making a tree change
The challenge with living in a regional area can be finding a job, or rather finding one that is close to home.
Would a 60-90 minute commute into work suit you and your family? Consider if you’re able to work remotely or whether your hours can be more flexible than the standard 9-5.
- Buy in an undesirable area
Ten years ago the Eastern Kampala was far less desirable than it is now, but over this time it has seen some of the strongest price growth in Uganda.
See More: House & Land For Sale
What has changed this area is that it has become far more attractive to young people.
Pros of buying in an undesirable area
It can take time for great local cafes and shops to spring up in areas that were once considered undesirable.
Locating to cheaper areas can definitely pay off, particularly if a lot of other people looking for cheaper homes also move there. Over time the housing stock of a once undesirable location becomes increasingly renovated and better shops and restaurants then set up to cater for new residents.
Cons of buying in an undesirable area
It can take time for areas to change.
So, while eventually there will be improvements in things like public transport, infrastructure and better local cafes and restaurants, none of these improvements will happen overnight. Can you live with this trade off?
- Remember, cheaper homes aren’t forever homes
Buying a home is almost always a good idea, as it sets you up financially and provides far more security in retirement than long-term renting.
If you are looking for a cheap first home, the good news is that it is unlikely to be your forever home. It’s just a way to get into the market sooner.
