Should You Buy A Home Or Investment Property First - So you've saved up some money and you're looking to invest. Do you blow it all on a family home? Or do you get a rental property first? What's the difference between each option and how do you decide?

In this week's video I explain the pro's and con's on picking one vs the other. I looked into this myself in the past and have rental properties currently and am about to buy a family home in the coming months if all goes to plan!

There's no right or wrong answer but I'll share things to consider so you can make a more informed decision.

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Pro’s of buying a home:

• Safety, security, peace of mind
• Can make changes to the home without asking for permission (may have to ask council for certain things though of course)
• No rent increases (although your interest rate may increase)
• Usually more space for yourself/your family compared to an apartment, backyard for the kids to run around etc
• Can get a better interest rate usually
• Don’t have to pay Capital Gains Tax when you sell
• Sometimes can get stamp duty exemptions
• Can use First Home Owners Grant (FHOG) & First Home Super Saver Scheme (FHSS) (assuming you’re eligible)
• Don't have to deal with bad tenants if you don't own a rental

Pro’s of buying an investment property:

• Rental cashflow
• Can buy anywhere you want
• *Usually* get better returns
• Diversification, don't have to put all your eggs in the one basket
• LMI & Interest is tax deductible
• Zero (or minimal) maintenance costs
• Generate income outside of your main job/business income
• Don’t have to tie up all your serviceability in the one big family home loan
• You can buy where it’s most profitable to do so, and rent where you actually want to live

Questions to ask:

• How important is 'owning' where you live to you and your family?
• Do you really value having your own space, backyard etc that you can customise as you please?
• Are you okay with potentially having a lot of your money tied up in your PPOR?
• What kind of expected returns could you get buying a family home in your area? If it's a crap place to buy, rentvesting might be the go
• Have you already claimed the FHOG or used FHSS scheme?
• What's your existing tax situation, eg high income etc?
• What's the rental market like where you want to live? (Ie. in some areas you can live in a nice place for cheap because of apartment oversupply. Rentvesting may make more sense here)
• Are you planning to have 25 kids and will need the room?
• Do you want to build major wealth with a big portfolio, or is just owning your own place the main goal?
• Consider land tax as well - can get taxed more if you have too much property in the one state

Hope that helps - More in the video, and feel free to chime in if I’ve missed any.

Ps. You can also do both of course, and you can take advantage of things like debt recycling but that’s a topic for another day.

Not a financial advisor and this is for entertainment purposes only.

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