For many Australians, owning the family home outright is the end-goal. But if you’re looking for a way to provide for your family long into the future, one house isn’t going to cut it. You’ll need to build a family property portfolio—a wise choice at all stages of your life, because each time you expand your property portfolio, you’re acquiring a future home for your children or for your own retirement.
In certain circumstances, you can use the equity you’ve built in your home to secure other investments. For example, say you’re ready to upgrade your lifestyle with a new home, but you don’t have enough cash available to pay a deposit. You could sell your current home, but then you’d have to find somewhere else to live between the two settlement dates, and the rent would eat into your savings. Instead, use a deposit bond or equity in your existing property as a 10% deposit, to secure the new property.
When it comes time to start (or expand) your family, you’ll want to create memories with your children in a beautiful property that really feels like home. You can avoid the hassle of renovating by using your current home’s equity to upgrade to a new home. At First Class Lifestyle, we offer access to a selection of home and land packages that are specially designed with families in mind, with all the conveniences you need in a great location. We can also connect you with developers who are happy to accept deposit bonds.
You may even find it advantageous to keep your existing property, creating a passive income stream as the rent rolls in from your tenants. And there are plenty of potential tenants out there.
Years down the road, when your kids are all grown up, you’ll probably want to help them buy their first homes and build their own portfolios. Your extra equity will come in handy as security, and if you’ve got a substantial portfolio, you may be able to offer them low-cost rental accommodation while they save.
If you’re considering buying your children a home, it’s best to act now. Property prices have been increasing at a rate that outpaces individual income growth, so you’re unlikely to ever catch up to the property price unless you secure the deposit now. For example, say you want to purchase in Parramatta for $600,000 and it’s currently within your borrowing capacity. If you wait ten years to help your children get into the property market, you may find you’re no longer able to service the loan, because the property may double in price to $1,200,000. What was once a $60,000, 10% deposit is now a $120,000, 10% deposit.
In all these scenarios, there’s one unifying message: the best way to set your family up for a prosperous future is to start acting now. Feeling ready? Talk to First Class Lifestyle.
Disclaimer: The information contained in this article is for information purposes only and cannot be relied upon. You should seek professional advice tailored to your specific personal and financial circumstances.