Arjun Chowdhury is one of a growing number of 'stayvestors', who are deciding to live with their parents while buying investment properties. ·Source: Supplied
A Sydney homeowner has shared why he has decided to continue living with his parents, despite saving up for years to buy his first home. As property prices skyrocket across the country, a growing number of first-home buyers are opting to take a different path to get into the market.
Arjun Chowdhury bought his first home in August last year, an off-the-plan property in Willoughby due for completion in the next few months. The 25-year-old told Yahoo Finance he has decided to keep living with his parents for the foreseeable future to help him service the mortgage.
“When it comes to paying off a mortgage, especially in the current interest rate environment, it’s tough,” he said.
“I need all the help I can get in terms of using another source of income, which is rent from an investment property, combined with my own income, because that’s just the reality of house prices in Sydney.”
Chowdhury works in finance and shared that he saved up a 10 per cent deposit to purchase the one-bedroom, one-bathroom apartment, with his parents helping with the upfront stamp duty costs.
Chowdhury said his parents, Aruna and Prodip, were supportive of him living at home and had encouraged him to get into the property market as quickly as he could. ·Source: Supplied
He said he was initially looking at buying an owner-occupied home to live in, but quickly realised it wouldn’t be as achievable, and opted to forego the Fist Home Owner Grant offer and instead purchase an investment property.
“Sydney prices are now so expensive that if you do want to buy something and be eligible for the first-home buyers grant, the areas I was looking at it was very, very difficult to get within that sort of range,” he said.
“Because of that, I just gave up on buying owner-occupier and went for an investment property.
“It meant that I don’t have to move in straight away and I can use the rental yield to help me out on monthly repayments for the mortgage as well."
Chowdhury said it could be seen as a “sacrifice” for people to continue living with their parents and forfeit some of their independence, but he thought it was the right decision for him and meant he could get into the increasingly expensive market now.
Stayvestor trend growing in popularity
Chowdhury is one of a growing number of “stayvestors”, first-home buyers who are buying a property to rent out while they stay living with their parents.
Ray White director of projects and developments Tim Abbott said he expects the stayvestor trend will only get more popular.
“It’s not that easy to get started on the property ladder because of the cost of real estate in Sydney,” he told Yahoo Finance.
“It’s generally first-home buyers jumping in to secure something that they will eventually move into and just need a bit of time.”
Chowdhury purchased an off-the-plan property at Willoughby Grounds and plans to rent it out to help cover his mortgage. ·Source: Supplied
Abbott said the main risk for first-home buyers was to ensure they could service their financial obligations even if they don’t have a tenant.
It’s also worth noting that first-home buyers may not qualify for government grants and schemes if they buy as an investor.
Additionally, while you may be able to claim some investment property expenses as tax deductions, if you end up selling your investment property, you may be subject to capital gains tax.
Harder to buy without help from Mum and Dad
Chowdhury said it was becoming harder for young people to buy property if they didn’t have some form of help from their parents, whether that be living at home, a cash gift, or having them go guarantor.
Recent Mozo research found 75 per cent of parents were giving their kids money for a home deposit without expecting it to be repaid. This was a jump from 33 per cent who said the same back in 2021.
The average amount gifted was $74,040.
Chowdhury said his parents, Aruna and Prodip, were happy for him to keep living at home with them and were actually the ones who encouraged him to get into the property market in the first place.
“I have a really good relationship with my mum and dad as well. I love staying with them, so it’s worked out really well,” Chowdhury told Yahoo Finance.
“It’s probably a cultural thing as well. My cultural background is Indian. One of those things with Indian or even South Asian parents in general is there’s really no pressure to move out of the house at any age.”
Chowdhury said it was becoming harder for people to buy a property if they didn't have some form of help from their parents. ·Source: Supplied
Chowdhury doesn’t pay his parents any rent, but said he chips in with the cost of groceries and food and helps out around the house.
“I’m very fortunate to be in that position. I’ve been saving up for a long time and that’s been a really big help for me in trying to accumulate as much as I can,” he said.
Chowdhury said he plans to rent out the apartment once it is completed, with standard one-bedroom apartments in the area currently going for between $600 to $700 per week.
He will reassess in a couple of years whether he wants to move out of his parents' place and into his apartment, which is at the Willoughby Grounds development on Sydney’s North Shore.
