If you’ve considered buying a home of your own but are put off by the thought of being tied down to a large mortgage in your twenties, buying an investment property as your first step on the property ladder might be the perfect move for you.
There’s plenty of benefits of owning investment to real estate Australia, and buying young means you have longer to take advantage of the perks.
Here’s why we think you should consider buying an investment property before purchasing your own home:
Hack your housing cost
Consider this. You are approved for a loan which would service a large family home in the suburbs, but you love your inner-city lifestyle and would miss your roommates. Purchasing an investment property gives you the best of both worlds – you are still on the property ladder, so you won’t get serious FOMO every time the media reports massive property price growth, but you keep living the renting lifestyle, living centrally and sharing costs between roommates. If you live with your parents, this is an even better hack!
You keep mobility to travel
Life is for living, and the ability to travel at a moment’s notice is not something we want you to give up. If your investment property is managed by a professional property manager (which we strongly recommend for your first property), all you need to do is let them know that you’ll be out of the country for a while so email responses might be delayed. Stress factor: zero.
You can buy out of state
This great land of ours is made up of many markets. Pick up a property investment magazine and you’ll be presented with multiple growth opportunities around the country. If you’re hunting for an investment property, you needn’t be tied down by location. In fact, buying your first investment property out of state can be a great way to build equity fast, as you may get a lot more for your money. Investing your money where it has the greatest chance to appreciate, regardless of location, is a smart move for any investor.
Learn by jumping in
The most important step for any investor is taking action. Yet many wannabe property investors never take the leap. Not you. Take that youthful optimism and get started.
Maximise tax advantage
Investment property is offered many juicy tax benefits, especially from negative gearing. Maximising the tax advantages of investment property can help with cash flow, especially when you’re just starting out. It also allows you to continue building your property portfolio whilst receiving healthy tax refunds on your PAYG income tax.
Buying an investment property before you purchase a home of your own is a smart strategy. It gets you on the property ladder, with tenants helping you pay down your mortgage, without tying you down. With the right property management in place, you can still live and work where you choose, with the added security of knowing you have started your own journey to wealth.