There are multiple things to consider with this question, the 2 main ones being CGT and servicing. If a person were to buy their main residence upfront they would have a large amount of non-deductible debt which would hurt servicing but they would have a CGT fee asset. Over time they would pay down the non-deductible portion of the debt and reborrow to invest. This would slowly improve serviceability. Over a longer period, they would have no non-deductible debt left at all and this is when servicing jumps while those renting and investing will still have the cost of rent paid to factor into servicing. For these reasons I would generally favour getting the main residence first. But many living in places like Sydney will struggle to buy the main residence there because of the high costs involved. The ideal situation with this might be to buy one which can be rented out initially and this will get some tax savings to help and keep debt recycling against this property and later move into it. The other option is to move in initially, get the 6 year rule for CGT working, and then move out and rent it. The trouble with renting and investing in areas that you might not want to live in is that you are not getting any tax exempt assets which can be sold later to help with retirement coming sooner. You might also end up paying a higher interest rate due to all the debt being investment debt, and often with smaller loan amounts for each loan. After a few properties there might be extra costs with land tax as well. The other issue with getting rental properties first is that you use up cash, generally, which could have been used to fund the main residence. This will result in later non-deductible debt later. For instance, I had a person who had come and seen me and they have about 3 properties which they have sunk $300,000 into – cash deposits. But this person now wanted to buy a main residence for about $500,000. Had they structured things right they could have had an extra $300,000 x 4% in deductions each year (for the next 30 years potentially). That was about $5,000 lost per year. It was actually higher as the rates were about 5% back then. So as a general rule: a) For anyone with cash savings I would say look at buying your main residence first and then go for investments by debt recycling b) For those with little cash, try to borrow off parents to buy the first investment property with 105% finance. Ideally get something you could move into now (and out again) or later. c) Try to invest where you want to live in the future so you could move in. d) If you can’t do the above, consider a sacrificial investment property which you pay down as quick as you can with the aim of selling it later and getting that main residence. Get some tax advice as well as credit advice.