If you’re in your twenties and earning a modest wage, buying a property is challenging. But it’s not impossible, as LJBA director Lauren Jones proved.

In this 9Honey article, Lauren explains how she saved a deposit despite earning a $60,000 salary. The keys were:

• Practising delayed gratification
• Sticking to a budget
• Educating herself about money and property
• Accessing government housing assistance
• Embracing some risk (but not too much)

Lauren also explains how she used the equity from that owner-occupied purchase to start building a property investment portfolio.

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Lauren Jones learned a lot during her time in debt collection, mostly about the money mistakes not to make.

“I learned what not to do,” she tells 9Honey.

That knowledge has held her in good stead as she has purchased her own home, something she achieved recently with a five per cent deposit and some government assistance aimed at first homebuyers.

“I think people prioritise today instead of tomorrow,” Lauren, 28, tells 9Honey. “They’re just having too much fun spending their money to put anything aside.”

She also became aware of the number of people purchasing depreciating assets before setting themselves up properly.

Laurens parents divorced when she was 17. Her mother, who was a “good financial decision maker” became so risk intolerant she decided to avoid all debt, including a mortgage to secure a home.

“Now she’s in her 60s with no property, and I think that is pretty scary,” Lauren says.

She describes her dad as more “risk tolerant.”

“I think I kind of managed to strike a happy medium,” she says. “I have a good balance of risk but also I found I was a very good saver. I saved my deposit probably within a couple of years on a $60,000 wage.”

Helia has released its 2023 Home Buyer Sentiment Report. It found that cost of living pressures, increasing interest rates, and housing affordability are creating a perfect storm for buyers trying to enter the property market, meaning most are unable to save a 20 per cent deposit despite taking extreme measures to try and save.

“The report also highlights a lack of awareness around alternative options that can help many home buyers purchase sooner. It also showed first home buyers are making the largest cutbacks in order to afford property.”

Lauren says saving for her first home during the pandemic made it easier because there were less opportunities to spend, and having to save have a five per cent deposit as part of the Australian Government’s scheme to support first homebuyers also helped immensely.

The First Home Guarantee is a Government incentive that allows first home buyers to purchase their first home with a deposit as low as five per cent, without the need to pay Lenders’ Mortgage Insurance (LMI).

LMI is a one-insurance payment that protects the lender in the event that you default on your home loan repayments.

“That was a big help actually because I didn’t have a lot of cash to put into it and the cash I had went directly towards the deposit which meant that I increased my overall borrowing capacity a lot.”

As did the pandemic, which meant there wasn’t much temptation to spend.

“You couldn’t go out, you couldn’t spend money,” she recalls. “I’d set myself a budget of X amount of dollars per week. That’s all that would go into my bank account to spend.

“If I didn’t have money, I wouldn’t spend it.”

Lauren had her eye on a property worth approximately $400,000. Interest rates were low so she was perfectly positioned to buy it, a townhouse in Brisbane.

She started educating herself on what to look for in a property purchase, including how to choose one that would quickly appreciate in value.

“And as soon as the pre-approval came through, I bought the very next weekend,” she says.

“I just knew as soon as I walked in, it had enough value and potential… the location was awesome, the walkability was as good as it gets, and that’s really what you want in a heritage townhouse. When you’re compromising on the actual dwelling, you need to prioritise the location, which I did.”

Lauren would have to spend a further $25,000 fixing it up to make it livable but that turned out to be money well spent.

“I did a full internal paint, re-did all the floors, tidied up the kitchen, tidied up both bathrooms,” she says. “I got an appraisal about 15 months later and it went from $400,000 to about $600,000.”

She decided to be aggressive and use the equity to purchase a second investment property.

“It was tough because my second loan was taken out maybe a month after the first rate rise,” she says. “And then obviously it kept going up and up and up and up and up each month in a market that was declining every single month as well.

“That was tough because the rent wasn’t even nearly covering the mortgage. I was still in a pretty good position on my own owner-occupied property because I’d obviously bought it when it was quite low, but it was really the investment property that started to eat into my cash flow.”

She managed to hang in, until her tenants left and she found new tenants willing to pay more if she would approve their pets, which she was happy to do.

“I was able to increase the rent about $175 a week. I wasn’t even trying to get that much in rent… but they came in and offered me more,” she says. “I think because they had dogs, they’re big Rottweilers, so no one else wanted to accept them.”

Now that her two properties are on more secure ground, Lauren is thinking about expanding her property portfolio further.

“Potentially I’ll look to draw some equity again and look to buy something else, whether it be another investment property or potentially look into doing some small-scale company development,” she says.

Today, Lauren has made a career out of helping people create wealth through property. She has started a buyer’s agency in Brisbane called Lauren Jones Buyer’s Agent (LJBA) Keeping Up With Lauren Jones.”