Forums / Property Investing / General Property / What First? My first home? Or my first IP?

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  • Profile photo of ElspethElspeth
    Member
    @elspeth
    Join Date: 2004
    Post Count: 3

    I am 19yrs and am saving hard for my first property.

    When I have have finnished saving…..

    SHOULD I…

    …..buy my first house for myself (and partner) to live in (getting the first home owners grant and not paying stamp duty if i
    buy in nsw)….

    ..OR…should I live in a rental property and work on buying IP’s first???????

    Any thoughts???

    Thanks!

    [eh]

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    Personally I would buy the home first. But there are many variables and itis a decision you need to weigh carefully.

    Cheers,

    Simon Macks
    Mortgage Broker
    http://www.mortgagehunter.com.au
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of thefirstbrucethefirstbruce
    Member
    @thefirstbruce
    Join Date: 2003
    Post Count: 133

    think about this:

    if you buy a home for yourself, get something you can stick a 2 bedroomed granny flat under or out the back of, and rent that out to a couple of quiet people (only works if you are in an area where renters want to live). pros-
    -someone to help with gardening, mowing lawn.
    -added security if the tenants are decent.
    -added value to the property.
    -rental income without paying extra stamp duty in and out in NSW.
    -cash income = tax free income , if you get the right tenant.
    – i think the FHOG may actually become more lucrative in the future. However, I am unsure if you can still get it if you have already bought an IP.

    Bruce
    Mooloolaba, Qld

    Profile photo of lifeXlifeX
    Member
    @lifex
    Join Date: 2004
    Post Count: 651

    To answer a question with a question:
    What is your investment strategy? Capital Gains/neg. gear or positive cashflow?

    This is what i’d do:

    If it’s +ve cashflow,….then to maximise and speed money you can put into investing,you choose whichever is cheapest for your living expenses.
    If renting is cheaper than owning a home (include all expenses) than RENT (usually cities)! and buy lots of IPs.
    If all your home owning expenses is cheaper than renting buy a home (usually regional).

    If it’s Capital Gains (and neg gearing), maybe buy the biggest home you can, tax breaks!

    If ya single and young, then get some mates to move in either way, they can pay board which helps..

    Good luck with your researching,[biggrin]

    lifexperience

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    Bruce,

    You can get the FHOG after buying an IP in this situation.

    Check

    http://www.mortgagehunter.com.au/first-home-owner-grant.html

    Cheers,

    Simon Macks
    Mortgage Broker
    http://www.mortgagehunter.com.au
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of thefirstbrucethefirstbruce
    Member
    @thefirstbruce
    Join Date: 2003
    Post Count: 133

    thanks Simon.

    Elspeth, I would also add that I don’t expect capital growth will be that strong in the next 5 years.

    I also assumed being 19, your IP tax deductions may not be that solid, based on you not having a gigantic income.

    Remember, the interest you pay out on an IP has to be recompensed via CG.

    You might want to run a spreadsheet with varying levels of cg to compare PPOR and IP.

    My advice would be to buy something you can value add to. This is probably the smartest thing to do when the market is flat and uncertain.

    Bruce
    Mooloolaba, Qld

    Profile photo of ElspethElspeth
    Member
    @elspeth
    Join Date: 2004
    Post Count: 3

    Thanks all for your suggestions so far. Everybody has have given me different insights…..which is great! I will print them off and keep them until I decide!

    Profile photo of ElspethElspeth
    Member
    @elspeth
    Join Date: 2004
    Post Count: 3

    [biggrin][biggrin][biggrin][biggrin][biggrin]

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