Investment property or First home ?

Discussion in 'What to buy' started by Arun, 26th Aug, 2018.

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  1. Arun

    Arun New Member

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    26th Aug, 2018
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    Hi there,

    I have recently moved to Melbourne. I am thinking of buying an investment property before buying my first home.

    Is it worth buying an apartment as an investment property?

    What will be the expenses after i buy the investment property ?

    Is it worth buying investment property before having my first home?

    Please advice.

    Thanks in advance.

    -Arun
     
  2. hobartchic

    hobartchic Well-Known Member

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    If you don't know answers to those questions you shouldn't be buying anything. I suggest you get some personal finance and investing books out from your library and start educating yourself.
     
    Propertunity likes this.
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Hi Arun

    Welcome to PC

    Much would come down to your personal resources, goals, and risk profile.

    Id start by looking at modelling what my resources can get me - ie can I get a unit and a house that I would , in terms of deposit and borrow cap etc, or perhaps not.

    if not that makes the current decision a little easier, but may also help to then set some goals around savings and income growth and some strategies as to how to attack same

    ta

    rolf
     
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  4. Propertunity

    Propertunity Well-Known Member

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    WandereringTribe and Arun like this.
  5. Shogun

    Shogun Well-Known Member

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    Arun likes this.
  6. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Hi @Arun
    As Rolf advised above, depends on your goals, needs, personal circumstances etc.
    We have had clients where they have considered the two options, and decided to go with buying home first.
    Key reasons for this has been:
    1) determining how long it will take to save up the home deposit, if you spent your savings on an IP
    2) if you buy IP first, you are letting go of after tax dollars
    3) if you don't buy your home now, when do you intend to be living in your own home? How many years? Depending on this - how much deposit could you save in this time for your home?
     
  7. PandS

    PandS Well-Known Member

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    To keep things simple it is always better to have your first home as PPOR due to compounding and tax-free status

    say you buy PPOR worth $500K now fast forward 20 years and it worth $1Million
    that 500K tax-free

    Vs you buying an IP now worth 500K and 1 Million later, you have pay tax on 250K
    then you start buying your PPOR, you start behind an 8 ball game with time on your PPOR so your tax-free gain on it will be a lot less.

    keep thing simple, forget about all sort of tricks with the number play,
    it may sound good on paper it doesn't work that well in reality.
     
    Property Twins likes this.
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    One pays CGT when one sells.

    In the world of never never land - ie never sell, and using a concept of "surviveability" , one should never need to sell.

    Middle term I do suspect we will see various govs encroach into that current PPOR CGT exemption in any case.

    ta
    rolf
     
    Tom Rivera likes this.

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