The dream of owning property in Australia has changed over the years. For many first home buyers, it’s no longer possible to own a picturesque home in the suburbs, or even a sizeable unit in an area that’s still close to work and amenities. So then why not buy your first home as an investment property? To find out how (and why), keep reading!
Why Buy Your First Home as an Investment Property?
Many first home buyers, especially “millennials”, are looking to live in desirable locations or close to work, but this dream isn’t always possible. This has seen many first home buyers “rent-vesting”, which essentially means buying an investment property to rent and then renting where you’d like to live.
If you buy your first home as an investment, you’ll be able to see a multitude of benefits. Read on to discover why you might want to adopt this property investment strategy.
Live where you want to live
Buying your first home as an investment and then renting means you’ll able to live where you want to live. It means you won’t be forced out into the suburbs or into regional areas where it can be difficult to get to work and see friends.
If you’re still not ready to settle down or just want to enjoy the lifestyle of living close to the city, you should definitely look to buy your first home as an investment. Then, you can always rent wherever you want to live.
Let tenants pay your mortgage
Perhaps you find your dream home and have a great deposit saved but can’t afford to live in it? Added to that, maybe you’re paying cheap rent where you are or you’re even still living at home? In that scenario, it’s better to buy your first home as an investment, and let someone else pay your mortgage.
By using the rent coming in as well as any regular savings, you’ll be able to pay off your loan more quickly than if you were living in the property yourself.
Plus, if your home is negatively geared, you can see some great benefits in those first few tricky years of paying down your loan as quickly as possible.
Buy sooner and benefit from capital growth
Keep in mind that investing in real estate is a long-term game. You’re almost always better off adopting a long-term property investment strategy.
If you invest wisely, the Sydney market is almost a sure thing in terms of long-term capital growth. Plus, the sooner you buy, the sooner you can benefit from that growth.
Areas like the eastern suburbs of Sydney, Sydney’s inner west and anywhere in the inner-central ring are all pretty safe bets when it comes to property investing. These areas should continue to see substantial capital growth for years to come. Once international travel opens back up, rents will also start to stabilise.
And if these suburbs are out of your budget there are plenty of other options, whether you choose to buy property on the Central Coast or look in areas like Newcastle or Wyong, which are becoming popular.
If you do go down this track, make sure you choose an area that’s in high demand. You don’t want to be stuck with an empty property in an area you’re not willing to live in. Or, choose a unique property; such as a small unit with a garden in a suburb where this is rare.
It pays (literally) to be well-schooled on real estate property trends and home prices if you’re looking to buy your first home as an investment property. Get our 2021 predictions for the Sydney property market here, or read more about property investing here.
Or, if you’re ready to buy, contact us for advice and speak to one of our knowledgeable team members. We’re Sydney specialists and we’re here to help. We can help you find a property to suit your lifestyle, needs and investment strategy.