Are you thinking about purchasing your first property? More people are choosing to purchase an investment property first, and to keep renting or living at home while they do so. So, what are the pros and cons of this strategy?
You may need less income to purchase an investment property, as you will be able to count the proposed rent from the property as income. However if you purchase for investment, you will need a larger deposit. This is because a first home buyer who is going to live in the property they are purchasing will receive a discount on stamp duty which will soon be as much as fifty percent, and they also receive a discount for the home being their primary place of residence. Investors don’t receive these benefits. Both investors and home-buyers will need to demonstrate genuine savings, but many lenders will require that investors demonstrate ten percent of the property value in genuine savings as opposed to five percent.
If your investment purchase is negatively geared, then you may be able to claim certain tax benefits. It would be very worthwhile to speak to an accountant that specializes in property investment to gauge whether this strategy would be beneficial for you.
If you would like to have chat about your options, or to find out just what kind of deposit and income you will need to purchase, give me a call on (03) 9789 5453. I would love to help you understand what’s available and what you need to achieve your financial goals. I will be moving offices shortly but I won’t be going very far – just around the corner to McClelland Drive. I hope to see you there soon.