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Buying An Investment Property As Your First Home, What You Need To Know

Entering the home buyers market with an investment property may be the road less travelled, but it may be an option for you. Before you commit to this decision, learn the ins and outs so that you are best equipped for this investment arrangement. Let’s take a look.


Emotion plays no part

Everyone will tell you that buying your first home is incredibly emotional, and they would be right. When your first purchase is an investment property, you need to objectively assess the asset on its merits and make a balanced decision based on facts, numbers and trends. Always do your research e.g. assessing the average rental yields per suburb. 


You may need to do some work

A key consideration when contemplating an investment property is the work that you may need to do on the property to make it immediately liveable for your tenants. This work might be legally mandated, or renovations to improve the cosmetics to help you get in tenants quicker but may potentially increase the rental agreement. You may also find that furnished properties attract a higher quality of tenant.

Consider a home that is newly built or has recently been renovated rather than a older property that may require immediate renovations or maintenance. 


Rent pays for the mortgage

Generally speaking, the main driver for first home buyers choosing investment properties over a home is the mortgage payment strategy. Positive and negative gearing can shave considerable time off the life of your loan, allowing you to buy and live in your next purchase sooner, or repeat the investment process once again. Crunch the numbers and ensure your financial position can make this decision viable.


Management obligations

If the purpose of buying your property is to automate your income with an investment that works for you, you may need to adjust your mindset slightly. True, your investment will earn money for you – but that doesn’t mean you can ride off into the sunset just yet. Having an investment property does come with some management obligations, which vary from communicating with real estate agents right through to direct tenant contact. Understand your owner obligations before you hand over the keys, and weigh up whether that investment of your time will work for your lifestyle.


If you’re unsure, chat to our friendly team who can put you in-touch with our trusted partner, Mortgage Link.


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