Purchasing your first property is a monumental achievement and celebration of tireless saving. But with the ever-changing nature of our lives, from careers to lifestyles, many Australians are steering themselves towards purchasing an investment property before their first home.
By purchasing an investment property rather than a home to move into, buyers are afforded more flexibility – both in the purchase they make and the lifestyle they lead post-purchase.
The first advantage to buying a property as an investment is that your pool of choices will no longer be constrained by suburbs or visual amenity unique to your own living preferences. It becomes a purely logical, rather than emotional, purchase decision.
It also opens the door to what’s known as rent-vesting. Rent-vesting basically refers to those invest in properties than can afford while renting in locations they desire, allowing them to move home and town as they please.
Ready to secure your first investment property? Here are our top tips to get you on your way.
Let’s brush up on the quick and dirty of what it means to own an investment property. While you won’t be eligible for certain first home buyer grants, you may be eligible for some tax benefits.
What happens if you happen to change your mind and want to live in the investment property you purchased?
First of all, you’ll need to declare this for tax purposes, and you will no longer be able to claim those nice tax deductions on interest repayments, council rates and land taxes. It can also affect capital gains tax (CGT) if you go on to sell your investment property, though this will depend on the timing of when it was your primary residence and when it was being rented.
Before you settle on a home that ticks all your budget boxes, jump online a do a bit of market research. Read commentary from industry professionals as well as historic data on house pricing trends in the suburb to glean an idea of where your house value could be headed.
While you’re at it, it’s worth while to do a bit of a background check on the area by talking to locals and real estate agents to determine the strengths of certain areas over others.
This might not necessarily mean choosing the house that’s right up the street from your favourite café. It’s more about immersing yourselves in the mind of the generic buyer to consider the proximity to public transport, key freeways or motorways, shopping centres and lifestyle amenities, and potential school catchments. Consider how your particular type of property might attract certain buyers and ensure those buyers will have access to the amenities they desire.
Source: Seattle facade by H&L Victoria
Looking to build your investment property? When weighing up pricing options from competing builders, keep your eyes peeled for ‘turnkey pricing’. Turnkey pricing will be a life changer when it comes to securing your first investment property and getting those first tenants in ASAP.
It basically provides the peace of mind that the price your builder is presenting you will include absolutely everything you could need to get tenants in the second the build is complete. This takes the burden out of arranging the nitty-gritty elements such as landscaping, fencing, driveways, and curtains after the build.