Property investment tip 9: 8 tips on saving for a house deposit in the shortest amount of time

When I graduated from school, saving for a house deposit was a very achievable, despite my low salary. But with property booms across the UK and Australia, and with inflation rising faster than salaries, home ownership has become much more difficult for first-time buyers.

I’ve researched various saving techniques over the past decade, and unless you’re the recipient of a generous cash gift, inheritance or the lottery, there really is no golden secret to saving for a house deposit (If you do come across a secret method, email me!).

Thus far, we’ve only bought properties which require renovation, in poorer towns undergoing regeneration. Not only are these properties cheaper, the deposits are lower, and the capital gains should grow over the long-term as the area develops. Thereafter, you can use the equity growth to purchase another property in a more gentrified area at a later date.

There are many ‘tried and tested’ saving methods, however, below is a list of tactics which allows you to save the most money in the shortest amount of time:

  1. Apply for government funding and stamp duty relief schemes for first time home buyers.
  2. Apply for industry related home ownership assistance schemes. Key workers such as nurses, teachers, police officers, paramedics, defence personnel and firefighters are often eligible depending on which country you live in. Check online to see if your industry has a scheme.
  3. Rent a house and sublet the rooms. The rent you collect from your tenant(s) should cover most or all of your rent so more of your salary can go towards saving for the deposit. Make sure you get subletting approval from your landlord.
  4. Find a higher paid job, get two jobs or consider working abroad. Other countries may pay higher wages which is one of the reasons I moved to the UK after school. Remember, you can always return home once you’ve saved enough or had enough.
  5. Become a freelancer or contractor. Your hourly or daily rates can be much higher, but remember non-full-time workers often need to show more documentation when applying for a mortgage. You can use a mortgage broker to help you with the extra paperwork.
  6. Sell your car and use public transportation or ride a bike. You’ll make and save bucket loads of cash from not having to pay insurance, MOTs and petrol. You can always buy a car after you’ve bought the property.
  7. Buy with a friend or a family member, but first, read my advice on buying with a partner
  8. Ask the ‘Bank of Mum and Dad’ or move back in with them. I’m not an advocate of taking money from your parents especially when you have the ability to work, but with property prices much higher than a single person’s salary, unfortunately, this extra help has almost become a necessity to buy a house in some major cities.

On a final note, clear as much of your existing debts. For example, having a $50,000 house deposit along with a $10,000 debt does not work to your advantage. In fact, it’s more likely you will be given a lower loan amount due to the debt.

Lenders will assess ALL existing debts against your salary and cash savings to determine if you are capable of repaying your mortgage.

Remember, if you can’t afford the mortgage repayments, then you can’t afford the property.

Please note, though I own a few properties, I am not a legal, financial or professional property expert. I’ve written this post to share my personal experiences and would love to hear your opinions and views.

So, what tips do you have on saving for a house deposit?

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