2nd property: first home or investment?

I'm ready to buy property No. 2.

First IP brought in 2015 for $400k, now worth $485K so can use equity. I also have $75K in offset towards deposit.

I earn $104K gross, so was inclined towards IP for tax benefits BUT I'm now considering own home given Victorian First home grant ($10,000 + no stamp duty if value <$600K). This works as I'm currently renting in Elwood (no plans to move for 12 months) and from what I can see wouldn't be a bad long term investment to buy there - If I can get a 1-2 bed unit for <$600k.

Other option is buy IP in a hotspot outer ring suburb, with potential for much higher growth.

Which way do you think I should go?

 

Whatever you end up doing, don't buy an IP with tax benefits as your primary motivation.

Also I don't know much about the areas you mentioned but if I had a choice to buy a 1 bedroom unit for 600k or a free standing 3 bedroom house in middle ring Brisbane for around 600k, I know there I would be going.


My 2 cents.

 

Hi Becky

Are you still eligible for the stamp duty concessions if you already own an investment property?

I know in NSW home buyers aren't eligible for the concessions where they already own an IP anywhere in Australia.

The new home owners grant may be attractive, but you are likely to be paying premium.

Ultimately depends on your goals including life plans, and if you want the stability of your own home vs renting. Given the current lending rules it would be good to look at your affordability post home vs IP purchase.