Smart solutions to get you on the property ladder

By Frank, Muriel Newman


Hardly a day goes by without housing affordability appearing as a headline in the news.

Although many believe owning their own home is the height of financial success, the reality is that many homeowners simply end up renting money rather than renting property. The aim of those housing themselves on the smell of an oily rag is to have comfortable accommodation without selling their heart and soul to the bank, so we thought we would mention some ways to get on the property ladder without the high debt.

We all need a roof over our head, but that "roof" does not need to be a 12-room, keeping-up-with-the-Joneses mansion with a huge mortgage and horrendous running expenses. No more than 25 per cent of a household income should go on housing (rent or debt repayment). Those living on a limited budget should be realistic in their expectations.

Build your home as you can afford it. There are smart designs around of houses consisting of a core building and various modules that can be added as the family or bank balance expands. Building your own home little by little over five years sure beats a 30-year mortgage. Or buy a shell and finish the interior yourself on a pay-as-you-go basis.

Why not buy an existing home for removal and resite it on to a section? Sometimes you can buy old houses at an oily rag price, but carefully check out the relocation costs - sometimes they can be as much as the house itself. Old houses also have a habit of being very expensive to renovate and maintain.

If you are handy with a hammer, why not build your own home?

You may need a bit of help and supervision from a builder. The builder will be able to buy the materials at trade discount (and pass all or most of the discount on to you) and give you tips on the more detailed points. A word of caution: check out the rulebook before you build.

Why not live in a garage or a farm shed for a while? With a little modification a two-car garage makes a very cosy bungalow at negligible cost. And when you can afford to build a home you have a sleep-out for the kids or guests.

When renovating, one reader recommends tackling jobs one at a time. That way, only part of your house is trashed at any time.

Consider living in a caravan. Find a small space to put the caravan and you are all set. But check out the dollars and sense in doing so. Although a caravan park may seem cheap, if you add in the cost of the site hire it may not be a bargain. You may be best to buy a section and park your caravan on it while saving to build.

If buying a section, why not buy in the country? Sometimes a 10-acre block in the country costs no more than a postage-stamp-sized section in town. It also gives you the freedom to grow your own food and run livestock. Look for properties with standing timber that may be milled for building materials. A reader writes that they built a house from trees on their property and saved about two-thirds of the normal price.

Instead of buying a house, invest in a commercial property. Convert part of it into residential accommodation and rent out the rest. That way you get a roof over your head and an income.

Many businesses like the security of having someone living on the property. One reader did exactly this. They lived in the upstairs area, which has an estuary view, and rented out the commercial space. Not only did they have free rent, but they made a packet when they resold the property.

Frank and Muriel Newman are the authors of Living Off the Smell of an Oily Rag in NZ. Readers can submit their oily rag tips at

- Hamilton News

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