THE findings of the Mortgage Choice 2013 First Time Property Investors Survey revealed that of the 1000-plus Australians surveyed who are looking to buy their first investment property in the next two years, Generation Y made up more than one-third (34 per cent) of the respondents.
Interestingly, 40 per cent of the respondents in this age bracket were willing to forgo the First Home Owner Grant in favour of buying an investment property before a home.
Meanwhile, the other 60 per cent of the Gen Y respondents already own their first or subsequent home and are now looking to make an investment property purchase.
Results showed Gen Ys were most motivated to purchase their first investment property by the need to set themselves up financially for the future (75 per cent of Gen Ys), followed by the perception that investing in property is more beneficial than the sharemarket (47 per cent) and rounding out the top three was the notion of planning for their retirement (43 per cent).
The greatest challenge for Gen Y first-time investors as indicated by them was saving a deposit (42 per cent), followed by finding the right property (29 per cent) and choosing their investment strategy (15 per cent).
Willing to sacrifice
Buyers need to be realistic about what they can afford and for some, buying an investment property may be the impetus to cut back on spending and lifestyle habits.
While purchasing an investment property can be an extremely rewarding exercise, the mortgage that is typically tied to the property is obviously a large financial commitment, which takes careful long-term thought and action to manage properly.
The right finance plan from the beginning can certainly pay off over the long term.
The survey shows 75 per cent of Gen Y first time investors are choosing to make lifestyle sacrifices to help them achieve their property goals.
The top-five lifestyle sacrifices included cutting back on general day-to-day spending, eating out less and limiting takeaway food, missing out on a holiday, delaying a vehicle purchase (28 per cent) and cutting back on alcohol related expenses.
Bucking the trend
It is encouraging to see Gen Y bucking the stereotype of being reckless with their money, proving to the generations ahead of them that they are more astute when it comes to investment decisions than given credit for.
It shows that age doesn't matter when it comes to building an investment property portfolio.
A sound investment strategy should set anyone up for success, regardless of their life stage.
For more information phone Richard Windeyer on 1800 01 LOAN.