Starting out with no deposit - is there hope?

[Sassy]

I have finally woken up to the fact that I'm gifting over $25,000 a year in rent to my landlord and I could be making money instead of losing it. yeah well duh.

I have zero deposit but a really great three figure salary. My long term boyfriend is a builder who is studying to be an architect and I'm a pretty dab hand at painting etc. I reckon we should be buying an investment property that we live in while we do it up - between us we could do most of the work ourselves. If we could add value and sell it off quickly, that could get us a deposit for the next place.

But how do we start? My family are hopelessly poor and none owns a house I could leverage off, so I'm on my own, but like I say I have a decent salary and could service a mortgage of $400-450,000 no problem.

Any advice?

[PC]

Topping up your deposit with a loan from the bank of Mum & Dad is a common starting point.

If that's not available - then get serious about saving.
Good bye sky tv and sell the 50' plasma.
So long Vodafone & shiny iphone.
Do you have any cars to sell? Start taking the bus.

Sweat, work & sacrifice - effective but not fun.
It's probably how that wicked LL bought the house you're living in.
Perhaps there's some government handout you could get instead?

[kapitibeanman]

Everyone starts with no deposit at some stage, so that's ok.

If you think about it, and although I know it was just a turn of phrase, you aren't "gifting" your landlord, you are actually paying for valuable services. Anyone wanting to get into the rental business will have to provide those same services, with all that entails.

Food for thought: Why are your family "hopelessly" poor? Why would you expect someone other than yourself to ever provide security for your loan, even if they could? Now that you have decided to start the investment process, when are you going to start saving? If you want a loan, what do you think the lender is going to look for?

In your position, as a first step I would create a ruthless budget before going to bed tonight, so that this time next year you will have a savings account with at least $50,000 in it, and no debt. No point in waiting, good "luck".

[Ahar]

Sweat, work & sacrifice - effective but not fun.

Couldn't agree more

In fact I'd go further and say....STOP SPENDING

Did you just wake up one day with this fab salary? And you tell us you don't have a deposit! How old are you? You're acting like some stupid kid expecting someone else to clean up their little messes.

And if this sounds really harsh....tough!


By the way, as you can see, I'm in a crouchy mood today.

[kapitibeanman]

Hang onto your hat, Sassy. I think you've touched a few nerves.

[spaceman]

luckily for sassy, you weren't grouchy there ahar ...... then you really might have cut loose

did you find the dragon????

cheers
spaceman

[AMR]

Yes there is - well worth a stab with a mortgage broker.

[Ahar]

Nah, no dragons....

Sassy......unfortunatley, I think the only way you'll ever be anything more than a wage slave is to get a handle on your spending.

I just get really frustrated when I see people who have so much going for them, who seem determined to squander their opportunities.

Take it from soneone who knows....life often throws curve balls.

In other words, one day you might just wake up to find that marvellous salary is just a memory.

I believe the insurance companies say that one in three people will be out of work for at least 6 months, due to ill health. Many of these people never go back to their usual occupation. Quite a few never work again!

Make hay now....whilst you can!

[Ahar]

Sassy.....

I recommend you read the book "The Millionaire Next Door"..... go to the library...no need to spend yet more $

Written by a couple of american academics who spent 20 years wondering why some people were wealthy...and how they did it.

You'll learn a lot.

Enjoy

[eri]

with a good salary you can save a healthy deposit

there's no rush with the market looking like another year of gentle decline

lots of time to think about suburbs and reno's

library books to read and forums to search

might be worth going in to discuss a mortgage with your bank though

expect to walk out with nothing

but next year when you come back in with a reasonable deposit they should remember you 1st visit be impressed with your rapid savings

the herald has some advice

Does money slip through your fingers? .................... Do you earn a respectable income, but save nothing?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10697365

[donna]

umm 3 figure salary - I guess you mean 5 figure salary e.g. 10's of thousands or do you mean a 6 figure salary = 100,000+?

Just something i picked up in your post. 3 figure is hundreds and 4 figure is under 10 thousand so you'd earn more than that.

Cheers,

Donna

....if you're earning a 6 figure salary then it's probably not just the rent you're paying to consider but the high rate of personal tax e.g. in the $30Ks that could be adjusted with some tax planning strategies that include investments like property

[Keys]

Wind up............

[kapitibeanman]

Wind up............

Just what I'm starting to think too. Funny, I didn't read three figure salary, my brain must have converted it to six figures. I mean, how could Sassy save $50,000 pa from a $999 pa salary?
Note to self: Be more careful in future.

[Sassy]

Thanks for all the replies, I think I've just been told off good and proper! Fair enough, at 35 I probably should have it more together. I have only just recently got the big salary, went to uni late in life and then just worked my ass off, proved myself and got a decent paying job within 5 years of finishing uni. I'm not a money waster, I'm supporting my man through university, pay a lot for rent in Wellington and other than that most of it goes on my own student loan (massive) and the credit card debts that I accrued putting myself through uni. And to be honest, I actually just didn't have my head in the space of saving for a mortgage deposit until just now.
Well I get the picture, thanks for the kick in the pants, hard saving is the only real way clearly. I think having figured out I'm slow to get started I was hoping to turbo boost my way into home ownership (like the career). I think the collective is right though, no fast track here. thanks for the feedback

[Sassy]

yes, I meant six figures. How embarrassing.