Which comes first, the home or the investment property?


Owning a free-standing home in the suburbs has always been the Great Australian Dream, but according to a white paper from Mortgage Choice in conjunction with research firm Core Logic Data, 70 per cent said ‘there is a need to imagine a new Australian dream that is more in line with reality’.

Mortgage choice suggests the Great Australian Dream is evolving to simply owning a home or investment property in a ‘desirable’ area. Regardless of whether that property is a free-standing house or an apartment, buying and owning any type of property is now the number one goal for Australians.

So which is it to be? A home or an investment property?

There are pros and cons to both of course but first and foremost, you’ll need to speak to a financial advisor to find out what you can afford, work out your long-term goals and then decide on whether to buy a home or an investment property first.

Here are a few points to consider when making your decision.

Pros for buying an investment property:

  • Lots of tax deductible benefits.
  • Depending on how you set up your investment, you may earn an income from it.
  • More people are happy to rent a smaller apartment if the location and amenities are right for them.
  • Interest only loans are available, which means you can get a better cash flow.
  • You’re not limited to locations and can even buy interstate.
  • The property can be used as leverage for future borrowing and can help you build a property portfolio.
  • It can be used to help you achieve long-term financial independence.
  • Once you’ve created your property portfolio, you can then buy the home of your dreams.
  • Invest in a property in an affordable area while you rent a property in your preferred neighbourhood.

Pros for buying a home first:

  • Stamp duty has been abolished for first home buyers of existing and new properties costing up to $650,000. First home buyers also benefit from stamp duty concessions for properties of up to $800,000.
  • As long as you keep up with the mortgage repayments, you have the security of knowing the place is yours – unlike renting where you may have to move at the end of a tenancy agreement.
  • You won’t need to pay capital gains tax when you come to sell it.
  • The property can be used as leverage to buy an investment property later down the track.
  • As a first home buyer you may be entitled to one of the New South Wales Government’s first home buyer grants.

Property ownership is still within many people’s grasp; interest rates are still at a record low, so when you’ve spoken to a financial specialist, come in and talk to us. Having been in the business for over 40 years in the Newcastle and Cardiff area, we do know a thing or two about property!

If you’d like to know more about investing in property, our talented team would love to share its knowledge with you.

We are one of Newcastle’s longest established real estate offices, so give us a call on 02 4954 8833, send us an email to mail@newcastlepropertymanagement.com.au or pop into our Cardiff office for a chat.

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