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First time buyers are increasingly turning to their parents to help them crack the property market, but what’s the secret to popping the question?
Breaking into the property market is tough. Even with higher LVR (loan to valuation ratio) loans that enable buyers to get by with a deposit of as little as five per cent, most first time buyers still need to save tens of thousands of dollars before making a start.
While a helping parental hand is not available to every would-be buyer, some of those baby-boomer parents out there will be well equipped for the task. Forking out cash is also not the only way in which parents can be of assistance.
When it comes down to getting help from the parents, it’s all in the pitch. Rather than ‘begging’ for a handout, it’s best to think of your request as a business proposition.
Making the pitch
Most parents are willing to help their children into the property market so long as they believe they are financially responsible, ready to take on the commitment and are also in a position to help themselves.
Before you make any requests, be sure to get your financials in order so you can show you’re a worthy investment. This means having a solid saving history and a paid off credit card.
Secondly, you need to treat the pitch as a business proposition. To make your presentation full-proof, follow the tips below:
• Don’t approach your parents until you’re serious and plan your pitch well in advance. That way, you aren’t putting them on the spot, plus you will have time to get your financials in order.
• Focus on the investment aspects of property and how their help could help you build your wealth and future – and in the case of co-ownership, their wealth as well.
• Put your request on paper, outlining your goals, what is needed to reach them, and the opportunity being presented to your parents. Include everything they need to know.
• This will give them something to look over later should they need time to consider.
• If you’re seeking help with the deposit, emphasise that you need their help now rather than later, and that early access to any inheritance would enable them to see you putting their hard work towards your own future.
• If your parents don’t agree right away, don’t be disheartened. Demonstrate your dedication by reporting your savings efforts and showing your interest in the property market.
• It might sound silly, but – be good! Obviously your parents won’t help you if you’re not getting along, or they see you spending your Saturdays in bed with a hangover. Mature behaviour is essential to sealing the deal.