We got our hands on my brother, Oliver Turner, an average, intelligent and street savvy 15 Year Old. We asked him a few questions, to see what he knew about Property.
With straight A’s in school, and a great school work ethic, Oliver is no average joe. He’s perceptive, switched on, and motivated to succeed (at least with his studies). Question him on maths, history or geography, and he’d ace the test. But we decided to throw him a different kind of test.
We asked Oliver, some often basic Property related questions, that most who have researched or been involved in the process before would be able to answer with no question. Oliver has the added advantage of a brother (me) who works 24/7 in the property industry.
So, what does this 15 Year Old know? And what can we learn from this short quiz?
- What is the average house cost (in Sydney)? $1 million
- What deposit do you need to buy a home? Between $10k and $50k.
- How long does a mortgage generally go for? Half your life.
- When owning a property, what other sort of costs do you have to factor in? Maintenance costs for the home.
- What taxes do you have to pay? No idea.
- What would you do at an Auction? Bid?
- How do you find Property? Websites, on the boards outside real estate ‘shops’.
- Who do you get to look over a contract? A representative of some sort?
- Who do you speak to, in order to get a loan? A bank.
Now, firstly, no I do not expect any 15 year old to honestly ace through those questions. But it raises a key question for us to consider.
The upcoming generation of future ‘property moguls’ I suppose, are already at a severe disadvantage. As prices continue to rise, the Government is providing no concessions for young people to gain assistance and refusing still to overcome archaic stamp duty laws (that in Sydney were designed in a time where plus $600,000 properties were luxuries) as examples.
In fact they are actually repealing things like the First Home Owner Grants in New South Wales.
Another disadvantage, is till the point that a young person is actively not processing parties, university, and job searches (all equally important adolescent endeavours), they are not considering the answers to those questions. In order to achieve or set a goal, one must sufficiently understand what’s required to get to that position. We are told by government figures to ‘get better jobs’ or ‘earn more money’, and yet there are no official avenues or structures in the education system in order to assist the young generation with the process, or even how to get those jobs or earn that money.
A young person who may have amassed enough money for a 5 or 10% deposit, is motivated now to go out in the marketplace and buy a property, yet as soon as they begin, they are thrown into a pool, a very deep pool, having to very quickly learn what conveyancers are, pest and building inspections, registering to bid at auction, getting a broker, understanding concepts around P&I loans, and Interest Only structures. All these concepts that even those on their 5-6th transaction, may not full grasp.
I asked Oliver one last question in the first part of this ‘interview’.
Do you think that you should learn this stuff at school?
Yes. I have no idea about any of this stuff. Stuff about where to go, who to talk to. Banks, how to get the money, how to get loans, how to invest, where to invest. I don’t know any of it and they don’t teach us anything like that.
A damning statement into the validity of our nation’s education system it would seem. But where the Government may fail, we will take it’s place.
On Part 2 of this series, I’ll answer all the key questions, comments, and misconceptions made by our resident 15 Year Old, so that you don’t have to learn the absolute ‘basics’ the hard way.