Investment Property or First Home: Which Should You Buy First?
Andrew Date
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With rising property prices in Melbourne, finding your dream home in the desired suburb can be challenging. An experienced buyer's advocate like Industry Insider can provide valuable insights and expert guidance to help you make a wise property purchase decision. Discover the 'rentvesting' trend and weigh the advantages and drawbacks of buying an investment property versus a home to live in.
With the continuous rise in Melbourne property prices, many aspiring homeowners face difficulties finding their dream home in their preferred suburb. As a result, an increasing number of first home buyers are turning to investment properties while renting – a trend known as?'rentvesting'.?
To make an informed choice, it's crucial to consider the advantages and drawbacks of each path. Let us guide you through the options, ensuring you find the best fit for your needs.
You should consider buying an investment property first if:
Firstly, Maintaining your lifestyle matters to you.?
With Melbourne property prices skyrocketing, people entering the housing market can find it hard to purchase in an area they especially want to live in. What makes a location desirable comes down to personal preference, but for many, the attraction of the amenities, parks, cafes, shops, and entertainment of urban areas is hard to beat. By renting in the area you love, you can still enjoy these cosmopolitan perks without "putting your house on it".
Additionally, You work in the city full-time.?
Many first-home buyers with demanding city-based jobs are choosing to rent closer to the CBD while investing in a property they can afford in the outer suburbs or rural areas. This option means you can enter the property market without giving up your CBD-based job and your urban lifestyle. If properties in your desired suburbs are out of your budget, you might choose to buy further away. That means you'll have to factor in extra travel time and cost if you commute to the CBD.
Moreover, You don't want to get too attached.?
Buying a property as an investment rather than to live in straight away also means that you may get less emotionally involved in the purchase and make more pragmatic decisions about the property. A common trap for first homebuyers is that they can get too attached and overpay for houses. Before buying your home, consider whether you're willing to forfeit your urban lifestyle and increase your commute to live in a home you own.
You should consider buying a home first if:
On the other hand, You don't want to take a big risk.?
Any property purchase carries at least a small risk, but if you buy an investment property and overcapitalize to do so, you're putting a lot on the line. If you buy an investment property to rent out to tenants, but the rent doesn't cover your expenses (i.e., your mortgage on the property, council rates, owners corporation, and other outgoings), you'll have to make up the difference while continuing to pay your own living expenses or rent. If this gets too overwhelming, you might be tempted to sell, which means you'll have to fork out extra in capital gains tax.
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Additionally, You want to access first-home-owner perks.?
Buying a home to live in first certainly has its benefits. It allows you to quit the renting game. Plus, you can access the financial perks of being a first-home buyer. The recent abolishment of stamp duty for homes under $600,000 allows you to enter the market with no stamp duty payable. Or, if your home falls between the $600,000 - $750,000 mark, you could be eligible for a first-home buyer duty exemption or concession. Your principal place of residence is your own little tax haven, and you won't pay capital gains if you decide to sell.
Moreover, You're sick of renting and willing to compromise.?
Owning your home brings a sense of security, freedom, and the ability to personalize your space. The practicality of accommodating children and pets makes homeownership appealing. However, it may require compromising on location. Planning ahead, saving money, and exploring options like living with parents or creating additional income can pave the way towards achieving homeownership.
Buying your first property requires extensive research and careful consideration of your needs. Whether you choose an investment property or a home to live in, an experienced buyer's advocate like Industry Insider can provide expertise, market insights, and negotiation skills to guide your smart purchase.?
Explore our latest video to gain insights and valuable tips for buying a property, whether you're currently searching or planning to buy in the future.
Industry Insider is an independent buyer agent committed to helping buyers achieve their desired outcomes. Our team of experienced agents can guide, execute, and deliver the best possible results for your property purchase. To save time, reduce stress, and potentially save or make money in the long run, hiring a buyer's agent is highly recommended when purchasing a property.
At Industry Insider, we have a team of knowledgeable buyer's agents ready to assist you in finding the perfect property for your budget and needs. Contact us today via phone at +61 8374 7652, email at?[email protected], or text message at +61 402 346 810 to learn more about our services and how we can help you with your property search.
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