Goodbye Renting Read online

  appointment for a private viewing with an agent that day on a property

  11

  which had just been listed. After fighting for parking spaces and trying

  to get information from agents already involved with other possible

  buyers, the couple decided to leave the open inspections to concentrate

  on the prearrangement appointment.

  This couple has become astute buyers who had made some pretty

  good decisions on property so far, who didn’t think with their hearts but

  used a formula that had proven to be tried and true.

  At the appointment they both knew immediately that this property

  would be a good investment. Its only shortfall was its land content (to be

  explained later), but it ticked the boxes for everything else. So they

  decided to make an offer that was within their price range. After a little

  negotiation, the price was accepted and the deal was done.

  So, with long-term tenants in place and the value now exceeding their

  original purchase price by $65,000 (in less than two months), this couple

  are confident they have made another valuable investment decision.

  It all sounds unbelievable, doesn’t it? In fact, I am writing this on the

  day that we, my husband and I, went to the auction of the neighbouring

  property. Yes, we are the couple and as much as we have done very well

  in the property market, we still can’t believe that we have just made so

  much money so quickly. Sure, the money is not in our hot little hands as

  such, but it is there in equity which can be used to progress with other

  investments. Access to those funds can be made available through

  various means or taken through the sale of the sale of the property, but

  either way they are funds to fall back on that we didn’t have six weeks

  before.

  So why did I tell you all this when all you want to do is to get into

  your own house?

  What I’m trying to illustrate to you is that If you play the waiting

  game before making the move into home ownership, it could be costing

  you more and more. While you’re waiting for the next tax return, to

  finish paying off your car, or for the kids to start school, you could have

  made tens of thousands of dollars and be living in a home that is yours.

  The right time for buying into a home of your own is always now —

  as long as you follow some simple rules and stay

  disciplined.

  There is only one WAITING GAME worth playing…

  and that’s the one that you play when you’re in your own

  home, and waiting for the equity to grow!

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  Introduction

  With all the negatives being forecast about home ownership, you’d be

  forgiven for thinking the prospect of buying your own home was not

  only out of reach but not worth trying for.

  Many people have now resolved themselves to the fact that they will

  always be renting and so they may as well live it up, have a good

  lifestyle and just keep on renting. This is the area, I believe, that is of the

  most concern. If so many people think the attempt into their own home

  ownership is futile, many won’t bother trying to make the transition and

  in doing so prevent themselves from obtaining one of the most

  significant assets for long-term security, and in my opinion one of the

  best forms of investment for their future.

  Now, I say my opinion, and some may not agree with my stand on

  this.

  Yes, there are other investments you can put your hard-earned money

  into, but ask yourself this question. Will any of these investments ever

  provide you or your family with the same sense of stability as that of

  your own home?

  What I am suggesting is that while times are indeed changing and

  house pricing seems astronomical there may need to be a change in the

  way we approach home ownership, rather than completely obliterating

  the notion or destroying the hopes and dreams of the many people whose

  life’s goal is to one day own their own home.

  Instead of finding all the reasons why it can’t be achieved we need to

  start looking at all the ways it can be. We need to start with

  encouragement and support for the plan to get there and provide options,

  possibilities and a plan of attack.

  But before we get too excited there are some statistics that you need

  to be aware of in order to put things in perspective.

  There has been a steady decline in home ownership in the past 30

  years for a number of reasons but the most important factor for you

  relates to the anticipated ratio of home owners compared to those who

  will rent within the next ten years.

  For example: In 1978 I was in high school in Australia and at that

  time over 73% of the population owned their own home.

  Ten years later, in 1988, only 66% of the population were in the same

  position and within five years that figure had dropped another 5%.

  By 2010 it is predicted (and coming to fruition) that fewer than 50%

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  of the population will be in the position of home ownership with a ratio

  of 60/40 by 2015.

  These figures indicate that getting one’s own home has become

  increasingly difficult over the past 30 years, which is in fact partly true. I

  say partly true because as much as I dislike blaming anyone in particular,

  I sincerely believe that there has and continues to be an inherent

  fundamental flaw in our system that has contributed to the downward

  spiral of home ownership.

  During the past 30 years some major issues have impacted heavily on

  our economy, including a recession, exorbitant interest rates, changes in

  government, the stock-market crash, the collapse of high flying

  entrepreneurs and so forth.

  But during this time, did we learn anything of real value? More

  importantly, have we ensured that the next generation learns from those

  mistakes of the past and in doing so put the necessary educational tools

  in place to prepare them for their own financial well-being?

  I do not believe we have.

  Right now, the economy for much of the Western world is thriving,

  with employment at an all-time high, productivity never better and

  prosperity flourishing. So why is it supposedly harder now to get into a

  home than ever before?

  If you put all that aside for a moment and consider what you were

  taught in school about your own financial future, you might be like

  many and come up with a big fat zero!

  Now, consider what your parents may have taught you about buying

  property, bearing in mind that 20, 30 or 40 years ago it was almost a

  foregone conclusion that you would get married, buy a house and have

  kids. Generally, you would probably learn as you go and hope to

  goodness you got it right along the way.

  If we were given any advice it was usually along the lines of “Make

  sure you pay off the house and after 30 years it will be yours not the

  bank’s”

  Whoopee! Thirty years of my life paying off a mortgage and then

  what will I have? Well, I’ll have a piece of paper saying it is mine and

  lots of wrinkles to prove I earned it!

  Surely th
ere has got to be more of a benefit than that? And do I really

  have to wait 30 whole years?

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  Unfortunately, I didn’t get any education on finance at home and I

  certainly didn’t get any at school. What I did learn was all through trial

  and error, with error being the most common aspect of the whole

  process. Boy, did I make some BLUNDERS!

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  But… what if?

  What if I had been taught from a very early age about the property

  market so that I was prepared when I needed to secure a home for my

  family?

  What if I was educated on how to pay off my mortgage quicker, use

  that equity to duplicate and buy more property, how to create and

  monitor long-term investments and to gain the financial skills necessary

  for my future monetary independence.

  What if?

  I had been instructed in my formative years on how to be fiscally self-

  sufficient, manage accounts, plan for my retirement and grasp the

  fundamentals of health costs, taxes and insurances — how savvy would I

  be when I became an adult? After all, I was always going to be an adult a

  whole lot longer than I was going to be child, wasn’t I? So wouldn’t you

  think that these skills might come in handy at some stage?

  If only…

  Alas, this didn’t happen for me and it more than likely didn’t happen

  for you. Instead, I had to suffer, endure hardship and drag my children

  through adversity, all because I had not been educated on such things

  and no one deemed it necessary to teach me. I had to go earnestly

  searching, become reprogrammed in my thinking and then adjust to

  more sacrificing in the pursuit of some security.

  But is that struggle really necessary?

  I now know that it isn’t.

  The pathway into getting one’s own house need not be as harrowing

  as all that, even in times when home ownership seems to be getting more

  and more out of reach. In fact, it can be far easier than you think if you

  get educated on how to do it from the outset.

  16

  If You Never Get the Breaks

  You’ve Gotta Make Your Own!

  Research suggests that many people are looking for ways to get into

  their own home but not necessarily getting the right information from

  the outset. They may go to financial advisers, banks, mortgage lenders or

  a friend for advice and while this is one sure way of getting help about

  accessing loans, finding out the pitfalls and getting an understanding of

  how the real estate market works, it doesn’t always mean that those

  people giving you advice know all there is to know in an ever-changing

  market, or that they have your best interests at heart.

  What if you’re knocked back by a couple of lenders and told that you

  don’t have the ability to borrow for a home? What then? Many people

  just give up the prospect of ever owning their own home or put the idea

  on hold until something triggers a need to try again.

  Clearly, the system in place as we have come to know it involves you

  making the first move into property ownership and unless you fully

  understand how to go about it, you are likely to stumble along cap in

  hand in the hope that the loan is approved by the financial institution.

  And if it is, you’ll be content with the outcome regardless. In the event

  of a refusal for a loan, the reaction can be worse. Often it has a negative,

  sometimes lifelong, effect on how that person approaches getting a home

  loan the next time, if at all.

  This is where we need to have a re-think.

  Given that this is probably one of the biggest financial commitments

  a person is likely to make throughout their lives, it might make good

  sense to have some knowledge of where to go, what to look out for and

  who to ask. At present our current system relies on the assumption that

  most people will just know what to do. Unfortunately, there is very little

  education, if any, in place that gives some clear guidelines to follow or a

  plan of attack and response when trying to get into your first home.

  If you’re someone who has experienced many, many years of

  temporary, transient accommodation, who has never been shown how to

  get into a home of your own by role models who could guide you

  through the process, much less plant the seed that it is possible to

  achieve, your chances of getting into home ownership might seem much

  less likely. It’s like trying to be aware of something that you have never

  ever been exposed to.

  Equally, a limited amount of information, much less encouragement,

  17

  is available to people who haven’t quite found the right pathway and

  don’t know where to go for help.

  When we’re having trouble with the things we aspire to achieve there

  are usually options available to us that will help us towards our goal. For

  example: getting a higher education, learning to drive or working our

  way into the career of our choice. The assistance towards that goal may

  include enrolling in a technical college to lift our qualifications,

  repetitive practising with a variety of instructors when learning to drive,

  or taking a course at night to further improve our skills in a profession.

  Even our personal computers have a troubleshooting system which can

  help us out of a problematic area.

  So why then don’t we have practice runs, learning directories,

  facilities for teaching and support to turn to when we want to embark on

  such a life-changing event as buying our own home? And it is life-

  changing because you become totally responsible for everything

  involving that property for the first time in your life and its for a very

  long time. Decisions must be made, from the colour of the curtains to the

  type and cover of insurance you’ll need. This, combined with the

  pressure of mortgage re-payments, rates and other expenses you’ve

  never had to consider previously, makes it a whole new ball game and

  it’s one you don’t want to lose.

  I don’t have the answer as to why this deficit in education exists but it

  is one that I will continue to campaign for as it is in dire need of

  addressing, I sincerely hope it will be recognised and implemented into

  the school curriculum sooner rather than later.

  What about our children?

  There is no doubt that our children’s future into home-ownership is

  rapidly diminishing, which is all the more reason why our generation,

  who can see the writing on the wall, have an obligation to do something

  about it. Each and every one of us can play a role in tutoring our children

  on the importance of becoming financially independent and how to go

  about securing a home, but education must also come from the schooling

  system so that children will have on-going coaching about their

  responsibilities and can be helped into reaching a fundamental

  requirement of life.

  It is a vital necessity of life, a life skill that must be taught, reiterated

  and updated at regular intervals. It is knowledge that needs to start

  making its way into children’s lives in the formative years, so that the

&n
bsp; economy and the welfare of future generations is sustainable and much

  18

  more promising.

  I am personally passionate about this, and believe that parents do

  have the power to move the education systems towards accomplishing

  this goal. I would urge you to take the time to petition, attend meetings,

  talk to other parents and write to MPs. This is your children’s future

  after all and that future could have a significantly better outcome with

  your help now.

  Through this book I hope to inspire, encourage and deliver

  knowledge on ways of getting you into your own address. I will argue

  that you can buy into your first property even when others are telling

  you that you can’t. That as much as the cost factor for purchasing is a

  major contribution, it is more the structure of how you do it that counts. I

  am going to reveal my own personal stories and demonstrate ways and

  means of getting a home others haven’t considered and show you that in

  order to achieve this goal, you have to look further afield, change your

  approach and fight against those indoctrinated beliefs we may have

  adopted from our elders. That’s not to say that what our parents and

  grandparents did in the past is completely passe, because it isn’t, in fact I

  would advocate that we need to revisit some (not all) of the older, more

  basic ways, which have fallen out of use, if we are going to make some

  real headway in owning our own home. What does need to change, and

  significantly, is the way we look at getting into a home and how to use it

  to its best potential.

  You need to be aware from the start there is a number of options

  available that can assist you into home ownership, but all require

  research and a great deal of consideration on your part in order to secure

  the best possible accessibility for your personal circumstances. Making

  that first jump into buying a property is exciting, at times stressful and

  often nerve-wracking. It takes time, focus and a word I use repeatedly:

  ‘discipline’, but I guarantee it is worth every short-term ache for the

  unprecedented long-term pleasure it can bring.

  The way to solve that problem is simple. Throw yourself into being

  knowledge empowered, boots and all. Get exposed to the real estate and

  the housing market by reading, asking questions, visiting display homes,