Monday, June 01 2015
While most people like the idea of buying their own home there's no rule that says that needs to be your first purchase. With the first home owners grant gone the benefits of making your first home owner occupied have diminished.
But times have changed, and now many first home buyers approach us to find out more about investing in property. There are pros and cons to consider in both situations.
Why buy an investment property first?
Buying an investment property comes with benefits. One of these is more flexibility in your living arrangements. You can continue to rent in that beach or inner city suburb that you love so much (but may not be able to afford to buy in), while still getting a foot on the property ladder. If property values rise, you won’t feel like you’re being left behind.
Depending on your situation, you could look for an investment property that offers the prospect of high capital growth, or a high rental return that will cover your monthly mortgage repayments.
You might also buy a property with renovation potential, and rent it out for a while before fixing it up and then demanding higher rent, or trying to make a profit on a sale.
Investment properties come with tax benefits. Most of the expenses you incur with an investment property are tax deductible. The big one being interest on the loan. This means your property could return you a substantial tax refund at tax time.
If you select the right type of property and structure things appropriately it can be possible to have a property that is completely self-funding. So you get a foot hold in the market without putting your hand in your pocket.
The importnat thing is to get some advice first and get an understanding of your options and the costs. Contact us to find our of property investment is appropriate for you.