Divorce has a devastating impact on almost every area of your life and it can take a long time to recover both personally and financially. While only time and patience can get you through the personal side of things, there are a few options that you can start to explore now, if you’re wondering how to get ahead financially after your divorce.
One solution that has, for many, produced considerable returns is buying an apartment off-the-plan, then selling it before you’re required to settle on the purchase. This is a somewhat risky strategy but, if you do your research, understand the risks, and are prepared (and able) to cover the costs (in the event that things don’t work out), it can be a really lucrative move for the savvy investor.
The key aspect of this strategy is that you can calculate the risks and be responsive to whatever eventuates. The Australian market has its ups and downs, but more often than not it has shown relatively consistent growth over long periods and has been relatively stable. With this in mind, buyers can get into the market with just the deposit, which for off-the-plan properties is usually 10%. This kind of outlay can be much more practical if you’re in the middle of your divorce and avoids you having to borrow the full purchase price of a property. However, this sort of strategy does rely entirely on the market continuing to rise.
The advantage of off-the-plan purchases is that you have the construction period to get back on top of things as well as an opportunity waiting for you after the divorce is finalised. You will either have a property that can be on-sold and ideally deliver you a decent profit before settlement or, if it turns out you can’t sell after all, a place to rent out while you get back on your feet, that you can then sell later in a stronger market.
The most important thing to remember in deciding to forge ahead with this strategy, is that you must be prepared for all possibilities. Be sure you can afford the deposit first of all, amidst your current financial pressures. Then do your research about the current market, as well as getting some solid advice from professionals about predictions for the next couple of years. Choose your property wisely, have a solicitor examine the contract, and be sure you understand the companies involved in the project so that no nasty surprises turn up during the construction process.
If you’re confident the market will continue to rise steadily, and you can secure finance if the unexpected happens, then hand over that deposit and get on board!
Once you’ve signed up, pay close attention to the project’s progress over the following months and find yourself a good agent to list the property with, several months before you’re required to settle on the property. In an ideal scenario, a strong market could deliver you many tens of thousands, which you can happily take as profit (but remember you’ll pay capital gains tax on it).
This strategy is definitely a gamble but the Australian market, despite being cyclical in nature, generally bounces back and if you can wear the risk, you may very well reap the rewards in the future.