Saving for a House Deposit

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    Every little strategy can assist when you're trying to save for a down payment on a home. Here are some ideas for achieving your savings target.

    Work out what you’re saving for

    "I'm saving up for a down payment on a property." It's a frequent call among people in their 20s and 30s.

    Typically, most customers want to save 20% of the purchase price (plus extras like stamp duty and conveyancing fees). It is more difficult to obtain a house loan without paying the additional expense of Lenders Mortgage Insurance if your deposit is less than 20%. (LMI).

    However, if a bigger down payment is out of your price range, you could speak with your lender about other possibilities. If a borrower doesn't have a sizable enough deposit but wants to avoid paying LMI, a guarantor can be a possibility.

    Just keep in mind that signing on as a guarantor is a serious commitment, so you and your family should carefully consider your options. Your lender may attempt to recoup money from your guarantor if you fail to repay your loan for whatever reason. We advise the guarantor to seek independent financial and/or legal advice to fully appreciate the risks associated with entering into a guarantee.

    Understand your budget

    When discussing property management, budgeting seems terribly boring, doesn't it? It needn't be so horrible, though.

    To find out where your money might be going and how much is left over after paying for essential costs, use the ANZ Budget Planner. Then you might need to look hard at your spending plan and consider possible strategies to save.

    You might be able to create a reasonable savings goal once you've completed your budget and determined where you can cut costs.

    Stick to your savings goal

    You must deposit this money somewhere with a savings objective, like $500 every month. Make frequent contributions into a different account that earns interest to consider saving money.

    To make it difficult for you to get the money, transferring it the day after you get paid could be a good idea. By doing this, you are saving money for your deposit before you have the opportunity to do so.

    You might be required to provide a savings account statement when applying for a house loan as evidence of your ability to make on-time payments.

    Reduce other debts

    Do you have a car or personal loan that won't go away? Or do you manage several credit cards? To focus on increasing your savings, you might want to consider paying down (or consolidating) other debt.

    Tips on how to save a deposit faster

    You might need to make a few more adjustments if you have a short window for your housing deposit. Here are some ideas to help you save money more quickly:

    • return to living with your parents
    • minimise how often you go out each month
    • set up a part-time job on top of your regular employment
    • make the most of what you already have
    • refrain from buying as many new things
    • instead of travelling interstate or abroad for a holiday, take a road trip
    • put any work bonuses or other windfalls directly into your savings account

    Additionally, you should check to determine if you qualify for the First Home Owner Grant and the first-time homebuyer stamp duty discount (although availability will vary depending on your state or territory).

    And keep in mind that you're not the only one trying to save for a down payment on a house. Many folks share the same circumstance.

    To sum up

    • You must know how much you need to save in order to put down a deposit on a home.
    • Make a thorough budget to find strategies to increase your savings.
    • Creating a high-interest savings account and making recurring deposits into it could be one approach to save money.
    • If you can, think about paying off all other bills.
    • Moving in with your parents is one option if you want to save more money.

    The 10 Most Common Critical Mistakes When Leasing Your Property

    If you've been considering renting out a home you own or purchasing a home to rent out, there are a number of factors to consider.

    Although owning a rental property might be a great way to earn some additional cash, there are some issues that need to be handled very seriously. Before making a snap decision, consider the advantages and disadvantages carefully. Before making a decision, at the very least, educate yourself. You are already familiar with news items, stories from friends or family, and other information.

    Tenants will violate their lease agreements and vacate before the conditions are fulfilled. Others will stay longer than they're invited without paying the rent. Some tenants deliberately cause damage to your property and show no regard for it, punching holes in the walls or ripping doors off their hinges.

    All of us have heard horror stories about tenants from hell who steal appliances, smash all the windows, or spray graffiti on the garage. Even while renting out a home can be a great way to make some additional cash, it's not always the simplest.

    It needs to be managed properly if you wish to rent it out, and mistakes can be very expensive.

    The fact is that there is no foolproof method to completely eliminate dangers, but careful screening can increase your chances of success.

    Many headaches can be avoided by becoming aware of the most frequent errors.

    1) Make Sure to Doc­u­ment Everything

    A written lease is essential. An appropriate rental agreement is required, given your circumstances and location. Before the tenant moves in, you must document the property's condition (we call this a P.I. property inspection report).

    Images of the property would be a good idea. Any item that can be moved, broken, or dug up should be listed. You must write a document covering every detail of the elements unique to your property.

    This essay ought to address issues like maintenance, animals, deposits, late payment fees, and utilities (water charges are a big issue).

    In the CTTT (Consumer, Trader and Tenancy Tribunal), verbal agreements and handshakes for renting will not hold up at all, especially if you have to claim property damage.

    Common sense should tell you that having a signed lease is ideal, if for no reason other than enforcing the regulations. Standard, generic residential tenancy agreements are available online, however, some aspects of your property will not be covered by them.

    Even if a tenant occupies a property only as a result of a verbal contract, they are nonetheless protected by the law. A casual rental agreement does not imply a casual eviction.

    Whether or not a formal lease was contracted, the same legal procedures for eviction will still be followed. In disputes over rent and eviction, the courts frequently give the tenant the benefit of the doubt because, in the end, he or she will lose their house. The biggest action you can take to protect your property is this.

    2) Never Fall Into The Dis­crim­in­a­tion Trap

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    It is crucial that you are familiar with the Anti-Discrimination Act.

    Know both your own rights and the rights of your tenants. Find out if certain groups have been left off of your rental listing to prevent appearing discriminatory. Questions regarding an applicant's marital status, disabilities, or social behaviour when showing the residence to any prospective tenants may be construed as discrimination. If you reject an applicant based on a background check and rental history, be sure to back up your decision with strong evidence.

    Aus­tralian law offers pro­tec­tion from dis­crim­in­a­tion or har­ass­ment due to any of the fol­low­ing factors:

    • Race (col­our, nation­al­ity or des­cent)

    • Sex (male or female)

    • Preg­nancy

    • Mar­ital status (e.g. singles or unmar­ried moth­ers)

    • Dis­ab­il­ity (phys­ical, intel­lec­tual or psy­chi­at­ric dis­ab­il­ity)

    • Homo­sexu­al­ity (both gay and les­bian)

    • Age (both young and old)

    • Trans­gender (transsexual)

    3) Insure Your­self Properly

    An insurance company views rental properties as carrying a higher risk than a home you live in, and typical homeowner's insurance does not cover full-time tenants.

    Specialised landlord insurance policies are available to protect your property from financial loss, damages, and accidents. Malicious damage by a tenant, lost rent, and public liability are a few things that aren't typically covered.

    NSW Fair Trading permits a landowner to demand that a tenant obtain tenant insurance. Landlord insurance plans do not cover the possessions of a tenant.

    In general, you as a landlord are unaffected by this. However, tenants insurance can stop a lawsuit from an uninformed tenant who thinks he can sue you because he lost his belongings in a fire he started in the kitchen.

    You say you have landlord insurance and believe everything is fine. RESOLVE THIS!

    You may believe that you are insured, but we frequently encounter landlords who do not check their landlord insurance policy and discover that they are not covered for malicious damage and public liability (these are not typical features of an insurance strategy).

    We suggest TICA insurance, which focuses on landlord insurance.

    4) Be Truth­ful About Import­ant Information

    According to the Residential Tenancies Act of 2010, you may be compelled to inform tenants of any hazards such as lead paint, asbestos, or mould if they are aware. You risk fines and lost rent if you don't comply.

    The tenant must be informed of any risks to their health and/or safety that the owner is aware of. Around the Seven Hills area, asbestos is a major problem because roughly 40% of properties have it and 10% require repairs to be considered safe.

    To top it all off, real estate agents lack the qualifications of qualified builders and are unable to determine if a wall or a roof needs to be repaired or not.

    5) Fail­ing To Screen Your Ten­ants Carefully

    You are mistaken if you believe that you can accurately assess character. In this instance, the adage that you shouldn't judge a book by its cover is correct. Just because someone is well-mannered and wears great clothes doesn't mean they aren't overspending. It can only imply that he's a skilled con artist. Even while thorough tenant screening can be a headache, it's preferable to have a tenant who won't take care of your property or who won't pay the rent on time.

    Eviction will be stressful, time-consuming, and expensive. That will greatly increase the perceived value of the initial screening. It's worth the effort to be persistent and to consistently demand a tenant database check. This is the simplest method for choosing a trustworthy and responsible tenant. If a potential tenant doesn't disclose a criminal history, you should find out if they have ever been evicted and whether they can afford the rent you are asking for.

    A monthly salary three times the rent cost is considered industry standard. Remember that only qualified property managers have access to tenancy ref­er­en­cing software and data, which are not available to the general public. There are two primary tenant databases in Australia: the Tenancy Information Centre Australia (TICA) and the Trading Reference Australia (TRA). Not all real estate brokers have access to both databases, so if you want to conduct a thorough check, you'll need both (TRA).

    The largest tenancy history database in Australia is TICA, and the TRA allows a property manager to view items like photo ID and images of damaged homes. Property managers are aware of the Residential Tenancies Act when it comes to background checks on applicants.

    The ACT is very stringent regarding personal data, such as shredding documents once an application has been processed to prevent identity theft and destroy any material discovered during a background check once it has been completed.

    Even with this kind of tool, your gut instinct still matters.

    It does not take its position.

    6) Take Your Rental Busi­ness Seriously

    Treating your rental with a casual attitude is among the worst mistakes a landlord can do. Despite the fact that it could appear casual, remember that renting out your real estate is a business. Strict fines may be assessed if you don't communicate with your tenant or the authorities. The Australian Taxation Office (ATO) also takes your rental property seriously.

    They view it as a business, and as far as they are concerned, your rent is business income. Always declare your rent proceeds as income if you don't take it at least as seriously as they do. Otherwise, you'll live to regret it. There will be paperwork involved, but don't avoid it.

    You'll end up paying penalties for non-payment, back taxes (nobody likes to do that), and interest fees as a result. However, there are also tax advantages. To be eligible for these benefits, you must provide documentation of your real estate dealings. Deductions are available for business expenses, such as specific repairs, mortgage interest, and property management costs. Additionally, your insurance provider treats your rental business seriously. You require landlord insurance for this reason.

    If a rental property burns down, it is not covered by a standard homeowner's policy. Liability insurance serves to protect both the inhabitants of your property and it. The CTTT in NSW is among those who take your rental business seriously. Numerous laws exist to protect tenants from hazards and discrimination in their homes. It's one thing if you don't have a smoke detector in your house. If you act in a similar manner in a rental property, you are in breach of your legal obligation to ensure the safety of your tenants.

    Unsafe sheds or garages operate in a similar manner. While you might be able to get away with it in the home where you currently reside, it becomes a different issue if you charge rent for the same property. It's similar to parents and kids.

    Regarding your property, you are legally obligated to ensure their safety. Structures, chemical hazards including asbestos, and security are all included. Make sure the property complies with the 2010 Residential Tenancies Act. Tenants who complain about safety, necessary repairs, and criminal activity reported by neighbours must receive a response from you. This is the simplest method for choosing a trustworthy and responsible tenant. Do it right if you're going to do it.

    Whatever you don't think before entering a landlord/tenant situation;

    A)  "She'll be correct, dude; it's just money." or

    B) "What could possibly go wrong, is it common sense, you don't need to know anything about it?" or

    C)  "Nothing that the ATO and CTTT are unaware of can harm them."

    If you make a mistake, there are severe penalties.

    7) It’s Not a One-Man Show, You Need A Team

    The best course of action is to hire a property manager with all of these facts to keep track of. Maintaining compliance with the Residential Tenancies Act regarding real estate and tenancy can seem like a full-time job. It serves as a full-time employment for some people. The hiring of some of those individuals may be a wise decision.

    Prop­erty Managers 


    You can be relieved of these burdens and have repairs scheduled and overseen by a competent property manager. Property managers can perform the labor-intensive screening and background checks. They may handle your advertising and offer you advice on fair market prices.

    This results in a house that can be rented for a great price and has more dependable tenants, which ultimately gives you more time and money.


    An accountant can work wonders to ward off the ATO. As a property owner, you are eligible for some fantastic deductions and can deduct your taxes from your income. An accountant can avoid a costly error by being aware of these deductions and requirements. These individuals may all be worth much more than their combined costs.

    8) Rent And Mort­gage Pay­ments Are Not the Same Things

    Although it might seem reasonable that the rent from a property should cover the mortgage or bank payment, the two things aren't calculated in the same way.

    Your down payment, the entire loan amount, and interest payments calculate your bank payment.

    Consider including your credit history as well as the property's market value at the time you purchased it.

    None of this is utilised when calculating rent.

    Rent merely buys you a place to reside for a while instead of a mortgage, which secures you a permanent home with tax benefits.

    Compare rent values for homes similar to yours on the local market to determine how much to charge, or hire a property manager to perform a CMA and give you advice on how to increase the value of your rental property.

    Rent revenue is used for monthly cash flow, not to protect an investment.

    Consult a qualified financial advisor or your account so they can explain the specifics of the cash flow and give you advice on how to make the most of your current situation.

    9) Pock­et­ing The Bond And Char­ging More Than 4 Weeks Rent

    Never break a written lease, and never keep the tenant's security deposit. A written lease agreement allows you to specify the restrictions and protects your rights. Don't think that once an informal agreement is breached you will still receive that bond.

    Where is your evidence that a bond was ever approved, after all?

    In that written lease, it will be explained. Your security bond is limited by law to four weeks of rent. The written lease specifies how damage payments are to be handled, and the bond will pay for one month's worth of missed rent.

    You cannot simply deposit the bond proceeds in a self-created account.

    To avoid legal repercussions, all bonds must be immediately filed with Fair Trading NSW, and the tenancy agreement must include a receipt or record of the payment information.

    Don't worry; you can file a claim against the bond after the tenancy ends for a number of reasons. Although legally, no more than four weeks' rent can be taken as a rental bond, several landlords attempt to charge this amount.

    It may not always be enough to cover problematic tenants, but if you are concerned about this danger, we strongly advise getting landlord insurance and hiring a top-notch property manager to lower the risk. You must immediately file your bonds with Fair Trading NSW.

    If a tenant sues you, your fair trading records will defend you in court. Landlord insurance ought to cover in any security gaps left by the bond and damage payments, even though they might not be sufficient in themselves.

    10) Upgrade Your Prop­erty And Attend To Urgent Repairs

    Many Australians believe that the paint peeling off the walls won't be a problem because they have been accustomed to it for so long. Alternatively, "I don't need to fix the air conditioning since I just don't use it, and electricity is too expensive anyhow,"

    However, that kind of thinking is expensive and can cost you thousands of your hard-earned dollars and other money-making opportunities. A competent property manager can demonstrate to you what amenities tenants will pay for and what they won't.

    It's a universal truth that the nicer the tenants, the nicer the property. Fixing up the property for others may seem a little counterintuitive, but it will pay off greatly.

    You can see that investing in high-quality faucets, paint, and appliances for your rental property will be worthwhile in the long term; just make sure to shop around first. Don't underestimate how much-perceived value may be added by a fresh coat of paint and some new stainless steel faucets. The length of time they last will offset the additional cost.

    A contented, responsible tenant won't have any reason to leave and will continue to pay rent for many years (as long as you keep up with repairs). Anyone who lives in a house they love and are proud of will inevitably treat the property with the same care as if it were their own. We frequently see that when a property is in disrepair, the only tenants it will draw are those who don't care about it; these are the tenants that occupy most of our time asking us to fix things.

    Additionally, tenants may legally make urgent repairs without your knowledge up to $1000 in NSW, or they may request a rent reduction through the Consumer, Trader, and Tenancy Tribunal, for example, if an air conditioner was broken and not functioning. Please talk to your local property manager about what improvements may save you money. We have also had experience with water-saving devices not being installed, and the landlord had to reimburse the tenants.

    Instead of being caught off guard by it when you're not prepared, you might as well pay the money upfront when you can.

    But if you've started thinking about buying your first home, you may be keen to know how to save for a deposit quickly.
    Move somewhere cheaper
    1. Find a smaller flat to rent.
    2. Move in with friends.
    3. Rent a room in a house share.
    4. Negotiate a lower rent with your landlord (not always possible, but sometimes worth a try)

    At a minimum, first home buyers need 5% of their deposit to come from savings. That means money they've saved on their own, not gifts or from family. ... After four years of diligent saving, Sarah had saved up $50,000 for a deposit.

    How much you need for a deposit depends on the lender and their lending criteria. Some lenders may let you borrow 90-95% of your home's value, so you may only need to save a 5% deposit. That could be as little as $25,000 for a property worth $500,000. Other lenders may have other criteria and demand more.

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