For many millennials buying a house is something of a ‘dream’, that they don’t think will ever come true. My friend, Brisbane IT professional Nick Burge, however, bought his first home at only 23 and says others can too. He’s frustrated by millennials constantly complaining about how they can’t crack the property market, and thinking everyone should be making it easier for them to buy their first home.
So how did he do it?
Nick managed to save for a deposit on his own home, after paying in full for his first car, without handouts from his folks. “A lot of my friends are in that situation where they think they’ll never own property, and it’s quite frustrating because it’s probably more a lack of research on their end,” he says. “Yes, it’s extremely hard. I know that from my own experience. But nothing worth doing comes easy.”
Buying his first car in cash
When it came time for Nick to buy his first car he first looked towards his parents. “It was hard to comprehend. They were financially able to help me, but they said from the beginning that they weren’t going to,” he says. “They said if I wanted a car I could save for it myself, so I challenged myself for a few months to work as many hours as I could and rack up that money”. “That made me really want it, and want to set myself some goals. To me it was buy a car first, buy a house second.”
Looking back on his parents decisions, he says it’s now the best thing they could have done, setting him on the path to become a self-funded success.
While studying at university Nick worked three part time jobs over the uni break and kept up as many hours as he could during semester. He also managed his money carefully, investing in different term deposits and keeping his spending money in cash.
When his investments had matured and he had enough saved, Nick withdrew from his accounts so he could have all the money in the one place, and went to the dealership with a massive wad of fifties. “I had $20,000 in notes, in cold hard cash. I took it to the dealership and we had to count it like 10 times to make sure it was the right amount,” he says. “The guy was like ‘this is the first time this has ever happened to us’.”
The then 18-year-old drove from the dealership in his brand new Mazda 3 with a zero account balance, but most importantly zero debt. “The feeling of knowing I had worked hard for every dollar was incomparable to anything else”.
Next stop, home ownership
After saving everything he had for his first car he gave himself a new goal- home ownership. Motivated by this and the need for experience when he graduated his degree, Nick started freelancing as a web designer and eventually landed a part time job at a start-up which turned full-time once he graduated.
He researched houses, but found an apartment would be more attainable, so decided to invest in a two-bedroom apartment in Coorparoo, only about 4km from Brisbane’s CBD.
In April 2015 he secured his first property with a price tag of $389,000. The median price for a unit in Cooparoo at the time was around $420,000 according to Realestate.com.au.
He had done his research and decided to buy off the plan which meant he required only a 10% deposit. He decided to save another 10% for his deposit by the settlement date to avoid paying mortgage insurance.
Being able the split the deposit into 2 payments gave him the confidence he needed. Having those smaller saving targets was even more motivational – “you’re almost there! Just a few more thousand to go”, he would say.
“I knew this personal milestone would be an even greater achievement if I somehow could fund the entire purchase myself” he says. “There’s an old saying along the lines … Pay off your own mortgage. Not someone else’s which really put me off the renting option”.
Living at home
Nick admits he’s lucky. He knows not everyone has the luxury of living with their parents and avoiding rent and other costs that come with moving out of the family home. Living at home meant that he was able to save at least $10,000 a year. He didn’t live there for free though! Nick still contributed to the family, paying $400 a month to his parents for board.
“I know not everyone’s in that position, but people can achieve different goals at different stages, and I think the discussion we need to be having is more around financial responsibility and educating people a lot younger,” he says.
“I suppose compared to other people, I don’t have a gym membership, I haven’t signed up for Netflix, I just spend my time probably working, I do a cheaper form of exercise, I have board game nights with friends. It’s just a different sort of lifestyle I guess, different priorities.”
For now, his top priority is paying off his mortgage, and his next big goal will be to expand his property portfolio.
Do you know a successful millennial? Comment below
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