Help with where to buy our first home!

[jericho]

Hi,

We are currently looking to purchase our first home, we are looking for a freestanding/semi detached 2-3 bedroom in a decent/upcoming area. We are at a loss as we have set ourselves a budget with a top of $550,000 yet are finding it hard to find almost anything in this price range. We currently have a deposit of just over $100,000, and all our finances are in place. My partner works in St Leonards and I am currently a student in the CBD, meaning that neither of us wants too commute for more than about 40 mins MAX. We have been considering areas such as St Peters, Tempe, Turrella, Arncliffe, West Ryde. as they are lower in price however are welcome to any suggestions. We ultimately only want to live in this property for the next 2-3 years with the view to buying something in a more suitable location and keep this property as an investment. Please someone point us in the right direction!!!

 

[alexlee]

Jericho, what do you want us to say? You want to live in a property type and area that you can't afford. If we suggest areas further out or to buy a unit instead of a semi, for example, how would you respond? For example, in your situation (I'm assuming you don't have kids) with $550k, I would probably suggest buying a 2 bedroom near St Leonards (Artarmon, etc) for around $400-500k. Live there for a few years and move when you need to.

Actually, it would make a lot more sense if you bought an even cheaper place and used the extra borrowing capacity to buy other investments instead, but I doubt you'll go for that.

Given what you've said, you don't have many options unless you up your budget or lower your expectations.
Alex

 

[jericho]

You are right in your assumption that we dont have children, we do however have a dog, hence the need for at least some outdoor space. We are not adverse to any suggestions, I guess we are just looking for different ideas as to what we could do, as we ultimately have become so overwhelmed with so many different angles to consider. I really dont want to up our budget, as this will therefore affect other areas of our expenses & saving ability. To be honest any situation other than what we have at present would be fantastic! We currently live rent free on the Central Coast and commute daily to work and uni, which we have quite frankly had enough of. Hence the desire to not have to travel more than 40 minutes each way where possible... Do you think that we have been looking in the right areas? Or are we being too narrow minded?

 

[alexlee]

Buying a property is always a balance between the type of property, the location and the price. You have to decide which is the most important for you. For example, if you want a short commute, you might consider a unit on the lower north shore. If you have a dog and you need a house, then you might have to consider someplace further.

The other thing would be what you plan to do in the future. For example, do you plan to invest in things other than your PPOR? If you want to, say, buy shares and investment properties, it might make more sense to buy cheap now, wear a longer commute, but have extra borrowing capacity (and cashflow) to buy other assets. No one likes a long commute, but by sacrificing some time now (when, in my opinion, it's going to cost you the least as you don't have a family yet), you might be able to build a few assets that will pay off in the long run.

Your PPOR shouldn't just be a one-off action. It should be part of your long term investment plan, especially if you have no other assets.
Alex