Time to read : 3 Minutes
In Australia 6.2 million of us consider ourselves homeowners. Of those, only 2.9 million are mortgage-free.
The dream is real for so many of us, but it is getting much harder to do it. Especially with our climbing interest rate and the increased cost of well, everything.
💰So how do some people manage to it anyway? We wanted to find out, so decided to ask them.
🎙️ This is our first interview in our new series Living the Great Aussie Dream – where we chat with Aussies who have managed it, despite the odds.
World meet Ana
Ana, 47, is well on her way to the great Australian dream.
🏡 And, she’s worked really hard to do it on just one income. Today Ana owns two properties in Sydney – one of which is (almost) mortgage free.
Can you tell us a bit about you and how you got to own two places in Sydney?
My parents migrated from Eastern Europe in the early 70s in pursuit of a better life. Some of the core values I inherited from my parents include – God and family first, work smart and hard, your word is your bond, and if you have property/land you can never go wrong.
What was it like buying your first place?
Getting a foot on the property ladder was both daunting and scary. My mother, bless her, pushed me very hard to buy a property in my own name and to be independent.
Where did you buy?
I bought my first property on the outskirts of western Sydney NSW. I did a lot of research before I bought it and assumed that if I bought in an area that was about to benefit from new infrastructure (the M7 was announced as the orbital at that time) I might see a modest increase in value over time.
What was your next property like?
My second property (a very small apartment in the city) was bought a few years later. If I'm honest, I would have to admit it was a bit of a mistake to buy this property as it had a complicated rental pool scheme that never seemed to get ahead.
How long did you hold on to them?
I sold both properties 12 years ago to buy a terrace in Sydney's Inner West which was very very run down. The kind of run down that leaves you in tears of frustration and never brave enough to go walking barefoot through the house.
Did you live in them or rent them out?
I lived in my Inner West property on and off for many years, renting it out in between, until I decided to renovate it with my dad four years ago. I have lived there for about six years now.
I renovated it myself with my dad which cost me a third to a quarter of what the builders were quoting. It was hard work but well worth it.
Can you tell us about your most recent property buy?
I bought an investment property in Sutherland Shire seven years ago. I am in the process of finalising a renovation with my dad at the moment. I am now considering moving to Sutherland Shire and renting out my inner west place for both lifestyle and financial reasons.
What has been the hardest part of juggling two mortgages?
Saving for the deposit, and the buyers regret for the first six months – every time.
My advice is to always have some extra funds in your draw down account for repairs. Something always seems to go wrong within the first six months.
And, what's been the best part?
Definitely the feeling and security of owning my own property.
Who are your finance heroes and why?
My parents.
They came to Australia with literally nothing and could not speak any English either.
They worked really hard, taught themselves English and raised three kids on a very low income and through property investment managed to become modestly wealthy.
What are some tips you would give someone saving for their first home?
Never spend beyond your means.
After basic living expenses, always put money aside for emergencies and for future property – even if it’s just small amounts.
Budget and do your own personal financial means test, because financial institutions may offer to lend you more than you can repay (especially in a high inflation/rising interest economic climate).
Be cautious of buying a property to the full borrowing capacity offered by lenders.
You may have to buy outside the area you ultimately want to live in, look at neighbouring suburbs if you can afford them.
When starting out, focus on getting your foot on the property ladder wherever you can.
Do your research in the various neighbouring areas and where you want to buy, look for properties with future infrastructure being built in the area for an increase in value, attend house inspections and auctions for at least six months before you buy, to understand the market for the area.
Hold onto property for at least seven to 10 years if you can, unless you're looking to buy something better.
Try to buy below the mean price for the area. This will help maximise your return on investment if you are looking for gains.
🤚 Lastly, but importantly, focus on career, learn as much as you can when starting out, upskill yourself at every step of the way and take the opportunities when they come your way.
Can you share some practical ways you have been able to save money?
I cook and prepare most of my meals at home and I tend to buy all my clothes, appliances and product needs during sales.
I had to make a decision early on not to buy big designer labels as a default and still generally don’t even now.
But, I do save and treat myself occasionally to what I really want, life needs to be enjoyed and lived.
I do a lot of reading and educate myself on basic investment strategies, economics and most importantly how they work.
📚 The Barefoot Investor is a great book to read as a start to understanding basic investment and economic principles, specifically for Australia. I wish I had read it earlier.
What are some things you wish you knew when you were 20?
Your body and soul matters – take care of yourself physically, emotionally, mentally and spiritually. If you start to fall apart your life falls apart.
Have courage – it’s ok to make mistakes, but face them, take ownership of them and learn from them.
Stay away from get rich quick schemes, they rarely work.
Find mentors and people who have achieved similar goals to your own, listen and learn from their experiences.
And of course – make sure you enjoy your life along the way!
What are you financial goals now?
Pay off my two properties as quickly as possible and purchase a modest hobby farm.
You work on a contract basis, has that been tricky or what has been tricky when you’ve tried to get a mortgage?
I worked as a salaried employee most of my career which definitely makes it easier.
All of my properties were bought during this period so I can’t really answer this question.
However, I am well advanced into my career now so it will definitely be easier to borrow as a contractor, given my steady income, than when I was starting out in my career.
Last but not least, what has been the best decision you’ve ever made for your future security and why?
To invest in property – it’s tangible, provides steady growth in the long run and can be used to generate income.
