How millennials are building a new Great Australian Dream
Young Victorians are finding creative ways to get a toehold in the property market.
Property prices may have plunged more than 10 per cent in Melbourne from their 2017 peak, but the distinctly Australian dream of home ownership still seems out of reach for those in their 20s and 30s who missed out with the wild price hikes of the past 15 years. With Melbourne’s median house price still holding above $800,000 and banks putting the squeeze on credit, savvy millennials are finding creative ways to get a toehold on the property ladder.
Aimee and Ben Stanton are building a tiny home empire.
Think big, build tiny
Aimee Stanton is not your average 25-year-old. She’s a qualified plumber who has also started her own business building tiny homes.
Sitting on a grassy clearing in the hills of Healesville is a blue 2.5-metre by five-metre tiny home, with a white-painted door and solar panels on the roof. Inside is a bed frame built into one end and a dividing wall hiding a bathroom at the other. Aimee built the tiny dwelling in the front yard of her parents’ property in Lilydale with the help of her dad Peter and 30-year-old brother Ben. They hope it will be the first of many tiny homes they build and rent out to holiday makers, with a portion of the takings compensating the property owners who agree to host the houses.
Aimee has worked hard to get to a point where she could launch her own business. As a young plumber she toiled 70 hours a week, taking on four-hour night shifts on top of her day job to build her savings. “I could earn $3,000 a week,” she says. “I thought, if I work my butt off now, I’ll have this freedom in the future.”
Before long she had enough saved to buy a three-bedroom weatherboard with her boyfriend in the Yarra Valley suburb of Seville. The couple put in $15,000 each and used lender’s mortgage insurance to cover the remainder of the 20 per cent deposit. Before she’d turned 20, Aimee and her carpenter partner were the proud owners of a $316,000 home.
Most people go to uni, get a job and work the rest of their life... [But] there are other ways you can make money and live.
They spent about $10,000 refurbishing and a year after they signed the contract of sale, they sold it for $416,000, dividing the profits equally when they split up.
Determined not to waste her hard-earned profit, Aimee explored some alternative ways she could invest in property. “I started looking around at places where I wouldn’t particularly want to live, but I could have an investment and it would go up in value,” she says. She bought a three-bedroom investment property in Thomastown, but lives with her parents in Lilydale.
It’s a handy arrangement while she works part-time for her builder dad and gets their Tiny Stays business up and running. Ben explains that their business model involves “building them, keeping the asset and renting them”.
“Most people go to uni, get a job and work the rest of their life,” says Aimee. “There’s other ways you can make money and live.”
Lucy and Nathan have gone from mobile cafe to charming country cottage.
Built in 1912, The Windsor Loch was saved from the wreckers and trucked from Melbourne’s inner east to a block of land they’d bought in Loch a few months earlier. Trailing behind their home on the South Gippsland Highway as it was transported, the young couple watched in horror as part of their hallway wall fell onto the bitumen and exploded in a puff of plaster dust.
Thankfully the contract required Moving Views to replaster any walls damaged in transit but it took months to piece the house back together. “When I walked in for the first time I burst into tears. I thought, ‘What have we done, we’ve spent all of our savings on this and it’s just a shell. There’s rain coming in. We’ve made a terrible mistake’,” Lucy remembers.
They’ve since added new ceiling roses and renovated the kitchen. Nathan taught himself to make a benchtop. Doing all the work themselves allowed them to transform the kitchen with new appliances and repainted cupboards for less than $3000. The land, house, relocation and refurbishment cost around $340,000.
“We have learned how to use the power tools and made plenty of mistakes so far,” Lucy says. But she’s looking forward to being able to reflect on their achievement and say: “We did it ourselves”.
The converted barn is now an listed on Airbnb and paying for itself.
Barn or bust
With its rustic kitchen and white timber staircase leading to a romantic mezzanine, The Barn in the heart of Heathcote wine country shines on Instagram as a beguiling couples’ retreat.
It didn’t look nearly so appealing when Jacob Stammers and his partner Brad first laid eyes on the 2.5-hectare property in 2016. Then living in a rental in East St Kilda, the couple were exploring the area for alternatives to buying in the city. “We were looking for a place with potential for rental income down the track within a couple of hours of Melbourne,” Jacob explains. “We fell in love with the barn.”
With an asking price of $220,000, the barn had exposed insulation and a dirt floor. But Jacob, 35, and Brad, 29, saw the potential.
Still, getting a loan wouldn’t be easy. As a small business owner, Jacob, who owns North Melbourne cafe Mr Tucker, already had a strike against him. Then there was the added complication of the barn not being classed as a dwelling.
In the end they triumphed, putting down a 20 per cent deposit and securing a loan. Once the barn was theirs, they spent about $50,000 over the next 12 months to make it habitable, installing a kitchen, painting everything a crisp white and decking it out with stylish furniture. To recoup costs they listed it on Airbnb.
Listed at $200 per night, The Barn wasn’t cheap, but it was beautiful and the bookings flowed in. Today, it is booked out months in advance, and the income is enough to cover the mortgage.
But for those considering following their game plan, Jacob has a word of warning: “Proceed with caution,” he says. Turning their investment into a profitable venture took time. “You need to be sure you can fund the mortgage repayments while it’s sitting empty.”
These stories and more feature in the new book Smashed Avocado: How I cracked the property market and you can too, by Nicole Haddow (Nero, $29.99). smashedavocado.net