Real estate consultant, 22, who bought his first home aged just 19 shares how he started climbing the property ladder after becoming a TikTok star with his budget tips
- Andy Pater posted a video on TikTok revealing a three-step property buying plan
- He said he bought a townhouse 'off the market' that hadn't been built yet
- Next he negotiated for the lowest deposit of 5%, or $18,000 to pay back
- The final step involves organising the home loan and moving into the house
- Another agent also shared how to set aside enough money to buy a property
A Melbourne real estate sales consultant has revealed how he bought his first home worth $350,000 at the age of 19.
Andy Pater, 22, shared his insight by posting a video TikTok in December 2019 and outlined a three-step guide explaining how others can do the same.
The Construct Homes employee has been in the property business for four and a half years and told FEMAIL while the process of buying a house was 'stressful' and 'one of the scariest things' he has ever done, he has no regrets.
Prior to purchasing the home, Mr Pater said he made two appointments with a property broker to ensure he was making the right decision.
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Andy Pater from Construct Homes (pictured) has revealed how he bought his first home at the age of 19
Mr Pater's first recommendation involves purchasing a townhouse 'off the plan' because the developer only requires the deposit with no further progress payments
'To be honest it was a very risky move purchasing the property at 19 because there was no guarantee the bank would give me a loan,' he said.
'When you're that age, even if you have a full-time job, it is highly unlikely you will receive approval for a massive loan to buy a house.'
Mr Pater said his parents opted to be guarantors on the contract to provide additional stability.
'The most important thing to consider before purchasing a house is to think about why you're wanting to buy it in the first place,' he said.
'If you're buying for investment or if it'll make you happy - great! If you're buying to impress your friends or family - that's not a sensible idea.'
In the TikTok video, Mr Pater's first recommendation involves purchasing a townhouse 'off the plan', meaning the property is yet to be built and the developer only requires the deposit.
He says buyers should then negotiate for the lowest deposit. Mr Pater managed to arrange a 5% deposit of $18,000 to repay over two years.
Despite not having the deposit at the time, Mr Pater said he sold a lot of personal possessions and borrowed money from family to assist with the weekly repayments.
'Because [the house] isn't built yet, you'll have about two years to pay back that $18,000 loan which works out [to be] about $170 per week – and if you're working and living at home that shouldn't be a problem at all,' he said in the video.
Asked about the 'off the plan' method, he said this option worked best for him as he only had to repay the deposit over two years - giving him more time to save.
He also said negotiating for a lower deposit can be difficult and success depends on how eager the developer is to make the sale.
Mr Pater said he managed to arrange a 5% deposit of $18,000 to repay over two years. He got the money by selling personal possessions and borrowing money from his family
The third and final step involves organising a home loan.
'The banks check everything you pay for - so it's a good idea to stop ordering takeaway food from UberEats and cancel your Netflix subscription,' Mr Pater said.
He also recommends going through a broker to save buyers unnecessary stress and make the loan process a lot easier.
Mr Pater says once buyers are up to this stage the house may have increased in value, adding equity to the mortgage.
He said depending on the market, buyers may have anywhere between $40,000 to $60,000 in equity to purchase another property.
The original video has since received more than 161,000 views and Mr Pater has continued to share his advice on the platform and his YouTube channel.
Asked about the current state of the market due to the COVID-19 pandemic, he said people are definitely still looking at buying houses.
After paying off the deposit for two years, the third and final step involves organising a home loan and finding out whether the property has increased in value
He said depending on the market, buyers may have anywhere between $40,000 to $60,000 in equity to purchase another property if desired
For those who aren't ready to purchase a property yet, Jared Kirkwood, another real estate agent from Melbourne, posted a 15 second TikTok video featuring three ways to set aside enough money to get started.
In the first step, Mr Kirkwood advises people to open four bank accounts and name them Erry Day, Bills Away, Rainy Day, and Home Someday.
Jared Kirkwood, of Sheridon Holmes in Melbourne, has shared his three-step plan to securing a home deposit online
Next, he recommends dividing your income by putting 40 per cent into Erry Day, 20 per cent into Bills Away, 15 per cent into Rainy Day, and 25 per cent into Home Someday.
The final step is to adjust and live off the 60 per cent of your income in the Erry Day and Bills Away accounts, while saving 40 per cent for a rainy day and home deposit.
The video has racked up more than 155,000 likes since it was uploaded earlier this month, but has left commentators divided.
Some fans praised the advice for being practical.
'You are more useful than school,' one person wrote.
Another added: 'Learned more from this video than my economics class.'
Mr Kirkwood says the first step to saving a home deposit is opening four bank accounts
Mr Kirkwood advises prospective home buyers to split their earnings across the four accounts
Others said the steps were not realistic for their budgets.
'Yeah bit hard when rent alone is 50 per cent plus bills and food/petrol/ day care/ car rego/warrants/tyres,' one woman said.
'Hahaha nope my rent is 75 per cent of my income but nice try,' another comment read.
Mr Kirkwood has been regularly posting popular real estate advice on TikTok since April.
In the videos, the New Homes Advisor recommends building your first home rather than buying a property.
The Melbourne realtor says people should try to live off 60 per cent of their income while saving 40 per cent
Mr Kirkwood explains the price of blocks of land and construction costs can be cheaper than buying a home in the same area.
This gives prospective buyers the opportunity to design their own home, and the value when it is complete will be greater than the cost of having it built.
First home owners can then use the equity made from building their first home to buy another, increasing their property portfolios.
Mr Kirkwood's steps resemble those in step two of best-selling financial guide book The Barefoot Investor.
In it, author Scott Pape advises people to open four bank accounts, and call them everyday, splurge (short term), smile (long term, such as holidays), and fire extinguisher (a house deposit).
Income is then divided, with 40 per cent going into savings (splurge ten per cent, smile ten per cent, and fire extinguisher 20 per cent) and 60 per cent used in the everyday account to live and pay bills.
