Should you buy whatever you can afford to get onto the property ladder?


Is it better to save up for a more expensive property, or should you buy whatever you can afford right now?


The answer to this is not as simple as you might hope for…


Buying for the sake of buying.

It is never advisable to buy a property just for the sake of it. If you don’t have much capital to invest, you shouldn’t just go and buy whatever you can afford.


Nathan says, property investors should be strategic with every move they make. He says it is important to make sure that each property acquisition will bring you closer to achieving your goals.


Just buying anything that is cheap might actually take you further from achieving your goals – something you definitely don’t want to happen.


Buying ‘this’ property because you can’t afford ‘that’ property.

Is it okay to buy this property because you can’t afford the one you would like to buy? This depends on a case by case scenario, says Nathan.


When he purchased his first property in 2003, it wasn’t his dream house – he wouldn’t have been able to afford that at the time. Instead he purchased an affordable property that was going to help him get to his next purchase. It was one that fulfilled the task set out in his to do list of goals, and one that would take him closer to achieving his end goal.


What will the property do for you?

Rather than worrying about the way the property looks or how expensive it is, it is better to consider what it can achieve for you.


Whether or not you should buy it depends on what you are looking for in order to progress your investing. Do you need capital growth, equity or a strong cash flow? Are you looking for something you can add value to or something that you can renovate to resell?


Once you know what you need to look for, deciding whether or not to buy ‘this’ instead of ‘that’ will become much more clear.


Not all good properties are expensive.

There are affordable properties out there in capital cities that can deliver strong cash flow or good capital growth. Every property serves a different purpose in an investment portfolio. It’s not necessarily true that only expensive ones are worth buying – it just comes down to what will work for you on your journey.


Clarity is key.

Nathan says it is important to have clarity on the structuring side of things as well as on what you would like to achieve.


In other words, what sort of properties do you need to buy now? What will you need to buy further down the track? And, why do you need to buy them in this order? What will each acquisition achieve for you at each stage of your journey?


Keep ahead of the game.

He says, it is also important to be ahead of the game. Depending on the market, buying now may give you a better edge. Education and knowledge of how the monetary system works will help you predict major changes in the market so you can make the most of favourable conditions while they last.


Have you been trying to figure out what type of property you should buy to kick off your investing journey? Please share your experiences in the comments section below.