Most people scrimp and save to purchase a home – but you may need to make real sacrifices if you have your sights set on a dream investment property.
Mortgage Choice's latest Investor Survey revealed that 71 per cent of Australians said they make lifestyle sacrifices in order to buy property, the third year in a row this figure has increased.
But what do these sacrifices actually look like?
Mortgage Choice figures show 8.6 per cent of people opt to move back in with family or in-laws to save money.
1. Cut back on your holidays
The average Australian household spends approximately $2,700 a year on holidays – the equivalent of $52 a week – according to ASIC MoneySmart figures.
Many families spend far more than this, however, going on two, three or more vacations a year. Is this an area where you could start making cutbacks?
More than half (54 per cent) of respondents to the Mortgage Choice Survey thought so, as they chose not to go on holiday at all in order to save money for a home.
2. Increase your earnings
There are many ways you can give your pay packet a boost. Taking on an additional job to save up for an investment property is one option.
You could also ask for a pay rise. Hays Australia research indicates this has about a 50/50 chance of success. The recruiter found that 32 per cent of Australians asked for a pay rise in the last 12 months, with 17 per cent succeeding.
Alternatively, perhaps now is the time to switch companies? You may even receive a counter-offer from your current employer. According to Robert Half, 94 per cent of chief financial officers in the country have offered workers more money to convince them to stay.
3. Downsize or move back home
Some of the biggest savings you can make are on mortgage and rent costs. That means you may need to reconsider your living arrangements if you're committed to investing big on your dream property.
Mortgage Choice figures show 8.6 per cent of people opt to move back in with family or in-laws to save money, while 8.2 per cent chose shared accommodation.
An increasing number of property investors are having to make sacrifices to their lifestyle in order to buy property https://t.co/KY5G0N8vxq
— Mortgage Choice Aust (@MortgageChoice) August 16, 2017
Obviously, these aren't realistic options for everyone, especially large families – but could you downsize your current home?
4. Delay buying your next car (or bike… or boat)
Australians love their vehicles, and the Federal Chamber of Automotive Industries' latest data shows the country could be on for a record-breaking year in terms of new sales.
But you may need to hold off on your next vehicle purchase if you're looking to squirrel away enough cash to buy an investment property. That goes for motorbikes and boats too, if they are your preferred mode of transport.
Can't avoid buying a new vehicle? A used car could prove a more cost-effective option. Don't worry, you'll be joining many other prospective homeowners – 38.7 per cent of Mortgage Choice respondents are delaying buying a new vehicle.
— MoneySmartTeam (@MoneySmartTeam) February 6, 2017
5. Fine-tune your food spending
A 2016 Rabobank report showed that Australians throw away about 14 per cent of their weekly groceries, which is the equivalent of $1,100 a year – and that's just the food we waste! Imagine the savings you could make if you shopped around for cheaper brands, reduced your restaurant visits and avoided costly coffees from high-street cafes.
MoneySmart recommends writing a shopping list, planning your meals and setting a budget as the best ways to limit your spending. You should also avoid shopping with kids or while your hungry.
We hope these tips have given you a starting point for some of the ways that you can save for your dream investment property. If you'd like more help, please click here to talk to a member of the team at PI Store.