More Australian couples are choosing to put down a deposit for their first home together.. Rather than pay for a lavish wedding. Even traditionalist parents are seeing the benefits of spending that money on the couple’s future. 

This trend has no doubt increased as the property market has heated up. First home buyers have found themselves in the position where homeownership is far from guaranteed. In this scenario, many have deemed it ludicrous to spend the same amount of money on a wedding… As could be spent on a house deposit.

Should You Buy a Home or Investment Property?

Perhaps a more interesting trend is that more of these couples are forgoing the wedding! Instead, they purchase an investment property rather than a home to live in. At first glance, it seems that these couples are left without a wedding and without a home. But the attitude of, “nothing now, the reward comes later,” could yield meaningful results. The timing could have significant benefits.

For example,

If a newlywed couple is considering having their first child in five years… And they have purchased an investment property with their wedding fund.. They could, based on equity growth, be purchasing their third property when their child is born. Depending on their plans.. They could either use residual income from their properties to help them enter their first home. Or they could continue to grow their investment portfolio! They will be able to achieve a level of financial independence by the time their child reaches school-age. It could also mean that the flexibility to sell high-value properties or leverage off investment income happens relatively early in life.

Another important benefit is education! It’s important to teach the next generation of children the importance of investment! They will learn the advantages that come from delayed financial gratification.

It’s this strategy that differentiates current property investors from previous generations. The confidence to say to family members and friends, “I need to plan for my future, please understand that a wedding isn’t vital to me,” and to then do without a family home with a view to the future is refreshing.

As many young couples have pointed out, the chance to gain access to a significant amount of money is only likely to happen twice in their lifetimes – when they are getting married, and when money is bequeathed to them upon a family member’s passing. And even for those couples lucky enough to have an inheritance to count on, the value of that inheritance may be significantly less by the time they gain access to it, with inflation and the cost of money constantly on the rise.

In Conclusion,

Young couples choosing to put their future selves in a more financially secure space will only lead to more good decisions down the road. It will also mean added financial security and the confidence that comes from having investments to fall back on.