Five cheaper ways to get into the property market

Here are five more affordable ways you can enter the Western Australian property market, which can make the dream of home ownership a reality.

Sjanna Sandalova

Western Australia is the most affordable state in the country for first home buyers, but many West Aussies still struggle to overcome the hurdle of saving for a deposit.

After you add up the 20 per cent deposit, stamp duty, finance costs and all of the conveyancing fees, you are left with quite a hefty dent in your pocket.

While there are some grants and government incentives available for first home buyers, a lot of these incentives, like the First Home Owner Grant, only apply if you choose to build. But what if you want to buy an established property and are struggling to accrue a deposit or are just sick of waiting?

Here are five more affordable ways you can enter the property market, which can make the dream of home ownership a reality faster.

1. Buy a unit or apartment

Your first home doesn't have to be your forever home. Buying an apartment, unit or even townhouse means that you can live in a more desirable location, closer to the city or coast, for a cheaper price to that if you were buying a house in the same area. What you lack for in space, can be made up for in lower mortgage repayments and generally speaking, units generate less energy and power, saving you money on bills.

2. Rentvest

If you are going to rentvest as a means of getting your foot through the property market door, you need to buy the right property. Rentvesting is a method of investing which involves buying a home in one area, renting it out to tenants while living somewhere else. Essentially, you want the tenants to be paying off your mortgage, giving you the freedom to rent in a location you want.

If executed correctly and with the guidance of professionals, you can enjoy the luxury of owning a property which may provide you with high rental yields or achieve better capital growth while you live or rent somewhere else. There are also a number of tax benefits that you get with owning an investment property, like negative gearing and capital gains tax.

However before committing to this strategy, be sure to weigh up the pros and cons.

3. Parental assistance

Sometimes, a parent will go guarantor. If you cannot offer a big deposit, a guarantor can be your solution by being that extra security - usually the guarantor's existing home equity on their property will represent this security.

A guarantor is not expected to make any repayments on your loan, but if something was to happen to the borrower, the lender will turn to the guarantor to make the repayments. This method also means you can borrow up to 95 per cent of your loan without paying Lenders Mortgage Insurance.

4. Buy in a cheap area

Buying on the outskirts of town is always more affordable. If you don't mind living that little bit further away or in a less desirable suburb, then you could be moving into your first home sooner, and for less.

5. Buy with someone else

If you go co-borrower with someone else, then you're splitting the deposit between the two of you. It also means that that person has equal share in equity of the home, and thus, equal responsibility to repay the loan.

It's important to make sure you enter into a loan with someone you trust, as the loan could potentially fall on you if the other party does not meet their loan repayments. It's always important to seek legal advice if you are entering into a loan with another person.