By Bob Tan
30 July 2018 18:00
Owning a house before you are 30 seem like a pipe dream to many young working adults today. Especially in a property market that seem to have many uncertainties and have a high entry level for prices. But with proper research you would be able to find a decent home for yourself. Normally two problems would come about; if it is in a convenient location (close to city-centre, amenities, or strategic locations with access to highways) it would cost too much compared to what you are getting. While it cannot be argued that price per sqft will go up in these places, there are sometimes projects that meet the balance between price and location.
There are some considerations, especially for the working adult before they make their choices. However, if you make some compromises, you could be on your way to owning your first home before you are 30 years old. To put into perspective, a 26-year-old data manager with an actuarial science degree, tells his tale of how he purchased his first home with minimal support from his family this year.
1) What amount of savings did you have and how long it takes to accumulate the down payment.
The upfront fees including the down payment and legal stuff, came up to about slightly over RM 50k. I worked my main job 2 and a half years and my side gig another like few months. But I’m generally a real cheapo person, so that helped me in saving for the amount I needed.
2) How long you have been working and roughly the salary you have accumulate to afford the down payment?
Salary started at around RM2.5k. Then it went up to RM3k, which went to RM3.5k after a year plus. Take home is around RM4k this year. But the company’s bonus is like 4.5 months, so that helps as well.
3) What lifestyle changes do you expect from this, ie. If you don’t smoke/drink do you so save a bit on that.
The whole point of the budget is to minimize change to my lifestyle. I don’t want to buy a place and then end up having to starve or sleep on a floor or skip meals. Some compromises will definitely have to be made, but I don’t think it’ll be much or that hard to make. My main expenditure is on my gym membership at a local gym. It does not have any of the fancy new equipment or personal trainers but it just enough for my usual workouts.
4) After you minus necessities and utilities, how much do you think you will have to use for personal or other expenses
I reckon about 50%? I had a goal in mind before I started. Because I wanted the house and all the fees (maintenance/utilities etc) to not go beyond 50% of my current salary. I worked backwards from there to find out what I can/cannot afford. Since I found a job that I can reach by using the LRT, I did not see a need to get a car. Anything else goes into my savings.
5) Why did you choose the home you bought, what are the rationale behind it, ie. good incentive from the developer, location is close to family or close to work.
Location was certainly a major point. I’ve been living in the same house for 10 years now. And in another house nearby for about also 10 years before that. This place is right in between those 2 houses. It’s home. Also, I needed somewhere that is walking distance to the LRT. Seeing as how I don’t have a car, I definitely narrowed stuff down to only those within walking distance of the LRT. Transits and busses were something I tried to avoid though. Too much of a hassle and it screws up my time planning.
The two location he previously stayed at was in Taman Megah and Kelana Jaya.
6) Any backup plans?
The backup plan is to ask for help. If one day I’m out of a job or something unexpected happens, I got to suck it up and get some help from family. I could rent the place out and move back in with them. Selling is also an option I guess.
It is important to plan and follow through with what you have. It is also important to keep your options open, especially something that is better suits your situation appears.
The 26-year-old who wished not to remain unnamed also express that his primary concern for most part is suddenly losing his job. In which he has about only a few months to quickly find a new job to support the mortgage. That is why he accumulated some savings, even thou he could afford the down payment for the property earlier this year.
Something important to note is that he was fortunate enough to finish his education without an education loan but reckon that he could still either balance out the repayment into his budget or pay off the loan before buying his home. It would set him back two to three years at most. There also Rent-to-own schemes out there to help start you off.