How did you save your first deposit(s)

[jkat]

I worked in a variety of low paid, casual jobs while studying (at school and uni).
At 18 my parents gave me a choice:
- $1000 birthday present if I invested it OR
- $500 cash

I took the $1000, added my own money and put it in a managed fund.

At 23, I realised the money in the managed fund was doing okay but not great I pulled it out and used it as a deposit for my first property.

 

[LarryC]

Nothing special with my story

Started work back in 2011 and saved every penny i made until i had enough for a 20% deposit. Living with the folks helped heaps as they paid for living cost.

 

[BayView]

I saved my first deposit by spending less than I earned

Richest man in Babylon

 

[vmay]

http://www.realestate.com.au/blog/people-save-first-home-deposit/

I thought this was interesting, perhaps people want to share their stories on how they saved those pesky first (or first few) deposits...

Sold my car, saved from wages after moving to cheaper city where house prices were less and better rentals available. It was 1984 - different era.

 

[knightm]

Sold my car, saved from wages after moving to cheaper city where house prices were less and better rentals available. It was 1984 - different era.

nothin to say this couldn't still work though...good job, it got you started.

 

[MickStephens]

Purchased our PPOR below market value and used the FHOG that my partner was entitled to.

For our first IP, I have no idea how we will get a deposit if needed. Probably borrow against our PPOR and borrow the rest. I've been using "other peoples money all my life..."

 

[charttv]

lived rent free at my dad's place while I worked full time in return for managing his IPs and running his mail order businesses. saved 21k out of a total salary of no more than 30k in about 14 months.

Serviced my own car, didn't buy new clothes and generally kept costs down. Things like trips to the movies and nights out drinking became pretty few and far between as I was focussed on leveraging in to a rapidly rising market ASAP.

 

[Sonia Valentine]

Hello All,
It was very interesting for me to read this thread as I am currently saving up for my first ever IP in Australia as I already have one overseas for which the loan is in my home country. Have managed to save $16,000 in the past six months and am already looking at a property that I might put an offer on next week.

Very very inspiring to read all of your experiences as I too am currently trying my best to do all the right things like do as much overtime as I get, spend frugally, have a disciplined saving plan and budget every week.

I must add though that it does get a bit frustrating at times but it is so nice too know and kinda be reassured that with consistent perseverance and patience all the hardwork will pay off.

Thank you for all the encouragement.

Smiles
Sonia

 

[z611143]

Worked hard. Was making over $70k before leaving uni, saved probably 75% of it. Landed a job making more after uni. Saved 90% of first year salary. Saved 90% of second year salary also.

Never took gap years (waste time) to travel the world (expense). In fact, accelerated my degree by cutting it by one year (extra year of money). If I was to compare myself with someone same age as me, but who took a gap year to travel the world, I would've been 3 years ahead of them by the time you factor in their travel expense. Add to that the money I saved at uni, I was around 5-7 years ahead of someone the same age who took a gap year. To get things in life, there are sacrifices.

Each to their own obviously. People who live a different approach will say they have different goals in life.

You were earning 70k in your penultimate (usually hardest) year of uni and what year was this?

Doing what?

 

[z611143]

FWIW ive been saving quite hard for a while (not that long) now and my goal at the end of February is to have 40k saved which is very realistic if everything goes to plan.

I would like to know whether i should look to put a certain amount away in account where i can build equity? I dont even know what these accounts are called? Can anyone help.

 

[Brady]

First deposit was combination $10k from parents (21st present for investing) then about $35k of own savings. Actually didn't use any deposit for first two purchases (guarantors) but had the funds available, have since decreased guarantor loan down from CG.

Used savings from #3 & #4 which were from savings from salary + bonuses.

 

[norwoodman]

FWIW ive been saving quite hard for a while (not that long) now and my goal at the end of February is to have 40k saved which is very realistic if everything goes to plan.

I would like to know whether i should look to put a certain amount away in account where i can build equity? I dont even know what these accounts are called? Can anyone help.

Are you referring to an account related to a property purchase and loan, or are you referring to a different type of account?

 

[Brady]

FWIW ive been saving quite hard for a while (not that long) now and my goal at the end of February is to have 40k saved which is very realistic if everything goes to plan.

I would like to know whether i should look to put a certain amount away in account where i can build equity? I dont even know what these accounts are called? Can anyone help.

Equity is the difference between loan balance and value of the property/secuirty. Do you currently have a mortgage?

If you're looking to save for deposit, find an online/reward type account with ~4% interest rate and get as much as possible into that.

 

[Deltaberry]

You were earning 70k in your penultimate (usually hardest) year of uni and what year was this?

Doing what?

Helping some guy write software where I was paid $25 an hour. Running a tutoring school. Did an internship that year that paid me 16k over 2 months.

 

[serendip]

My first deposit, I worked in London for a year on an ex-pat deal & saved 1/2 my salary. Came back to Australia, borrowed more than I could afford, bought a unit in 2001 & sold it for exactly the same amount 3 years later. Wish I'd found this forum then

2nd deposit was saved over the next 10 years (with far too many overseas trips and much financial frivolity in the mean time), bought 3 years ago, only this time the property has appreciated & now it's time for the next stage.

 

[z611143]

Avoiding LMI

Do people have a view on needing to have 20% of the mortgage to avoid LMI or do they not think it matters?

 

[LoneWolf]

Do people have a view on needing to have 20% of the mortgage to avoid LMI or do they not think it matters?

This would largely be depended on your personal situation and overall strategy

Based on your question, its clear that you are at a starting point of your investment path, I would suggest just buy what you can afford, even paying a bit of LMI is not all that bad, you may miss a bigger boat in trying to save that 20%.

 

[Brady]

Do people have a view on needing to have 20% of the mortgage to avoid LMI or do they not think it matters?

90% inc LMI is a nice spot. The cost of the LMI is worth in IMO to keep access to capital/cash for further investing.

 

[LoneWolf]

90% inc LMI is a nice spot. The cost of the LMI is worth in IMO to keep access to capital/cash for further investing.

Brady, my report, thank you

 

[Colin Rice]

90% inc LMI is a nice spot. The cost of the LMI is worth in IMO to keep access to capital/cash for further investing.

88% + cap lmi is even sweeter if funds permit as the whole deal stays under 90% normally, which saves on LMI premium and seems to get approved easier/quicker.