Receiving rental income from your investment property whilst you continue to rent elsewhere allows you to live in your most desired location whilst your investment property accrues value over time. Whilst many people enjoy the flexibility that such an arrangement can provide, the last thing you want is to make a mistake which you later regret. Being fully informed will enable you to make a confident decision, here are 4 key considerations to take into account when purchasing an investment property as a first home.
Sydney is a diverse city with each suburb having a unique vibe and appearance. We all have a favoured location in mind when searching for a property, but sometimes the budget doesn’t quite stretch and alternative arrangements may need to be sought. This is where buying an investment property in your favoured suburb can be an excellent decision. Even if you can’t afford to live there right now, you can secure a property in the area and draw a rental income whilst living elsewhere. As your finances improve and the balance of your mortgage reduces, you can start to make plans towards moving into your dream house and suburb.
It’s hard to go wrong when picking an area to live within Sydney, but some areas are expected to undergo significant population and infrastructure growth in the future. This in turn will typically result in substantial increases in property values and demand for rentals in the coming years. By focussing on growth areas for investment, you can benefit from affordable property prices whilst anticipating a good future return on investment (ROI). This will enable you to maintain a great lifestyle without feeling financially stressed. You may even wish to consider investing interstate or in a different type of property such as a dual living home to open up more opportunities.
Before purchasing an investment property as a first home, you should be cognisant of the fact you will likely not be eligible for any grants, concessions or exemptions. This may include the First home Owner Grant, as well as stamp duty exemptions and concessions. You would typically need to reside in your property for a minimum of 12 months if you wanted to take advantage of these benefits. Take some time to crunch some numbers and think about whether or not buying an investment property as your first home is the right decision for you. In some cases, you may be better off purchasing your first home as a primary residence for at least 12 months, and then using it as an investment property later down the track.
Owning a property comes with additional ongoing costs and maintenance. Whilst buying an existing home in your chosen area is one option, you should bare in mind that you will likely need some additional funds set aside for repairs and maintenance. Plumbing and electrical issues are particularly common in most older homes, and you may find that the kitchen and bathrooms are simply inadequate for contemporary lifestyles and family living. There’s plenty of room for error, cost blowouts and delays when undertaking a home renovation, and the hassle of maintaining an older home can be very time consuming.
Buying a House and Land package can be a more cost effective and satisfying solution for many first home buyers, as they can enjoy a brand-new dream home without the hassle of maintenance and repairs. Everyday Homes are pleased to offer complete house and land packages in some of Sydney’s leading growth areas, so you can simply pick a location, block type and house design then sit back whilst we get to work building your ideal home.
There are a number of tax benefits which you may be able to take advantage of when purchasing an investment property. This might include:
Discuss Your Investment Property Needs Today – Contact Everyday Homes
Everyday Homes have a wide range of NSW house and land packages currently available, and we also offer contemporary dual living home designs. If you’re searching for a great investment opportunity, we can help you find the right property for your needs and budget.
Call today on 1300 72 55 00 to speak with a member of our team. We look forward to assisting you.