It seems to be popular opinion that many investors – especially the young ones – have only been able to get into the market and really build a portfolio because they’ve received help from someone, usually their family.
BY VANESSA DE GROOT
I must confess, in many instances I believe this has been the case. It might not necessarily have been that they’ve been given a sum of cash for a deposit; it might just be that they’ve lived at home for a long time, well into their 20s, largely all expenses paid, which has enabled them to save money to buy property.
But there isn’t anything wrong with that, in my opinion. If you’re able to get a headstart in the market with the help of your family, then I think that’s great. Unfortunately not everyone has that opportunity, but if you do, then I say you should take it with both hands.
I do think, however, that if you’re given that help or opportunity you need to make the most of it. And sometimes I’m not sure that some people do.
If parents simply give their offspring a great big deposit for a property – or even buy them a property (yes, I know people who have had this happen) – I’m not convinced that they really learn its true worth.
What I mean by ‘true worth’ is what it takes to acquire the money for that property. It’s hard work and if you really have to work for it yourself then you really understand its value and the importance of investing – you understand how hard it is to come by wealth and what sort of discipline is involved with developing wealth.
You’re also more likely to make wise investment decisions, I believe, rather than merely selling the property on a whim and deciding to buy something bigger and better that you want to live in, for instance.
There are, I’m sure, many people who are given a deposit for a property and do understand what it took to get it, so they work hard to keep the property and continue investing.
The perception out there though of people who are given a leg-up into the market isn’t great, I have to admit. Many people seem to think that unless you’ve really worked for a deposit from scratch, then you haven’t done it properly.
What do you think? Does it matter how you manage to buy your first property? Have you been given a deposit or help by your family to get into the market? And if so, have you made the most of that help by continuing to invest?
Vanessa De Groot is the deputy editor of Australian Property Investor magazine, www.apimagazine.com.au
I think that it’s great if your family can give you a head start. However, I do think that it is important to have to do it yourself and actually work for it so that the next time around, you don’t make the same mistakes. If it is just handed to you, then you have no experience what-so-ever. I had to start from scratch as my parents weren’t into property investing, but i have learned so much and will make sure that my kids can get all the advice they need from me…and possibly a bit of help too.
Comment by Property Investment Coach — March 23, 2011 @ 9:26 pm