Can you buy an investment as your first property?

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 You’re ready to buy property, but there’s a problem.

Maybe you can’t afford to buy where you actually want to live. Or perhaps you’re happy renting where you are and would rather put your money towards an investment property.

So, can your first property be an investment?

Yes, potentially.

You don’t have to buy a home to live in just because it’s your first property purchase.

But buying an investment first can affect your loan, the costs involved, and your eligibility for some first home buyer assistance. So it’s worth understanding the differences before deciding.

 Sometimes called rentvesting, this strategy generally means renting the home you want to live in while owning an investment property somewhere else.

You might consider it because:

• Property where you want to live is outside your budget
• You’re happy with your current living arrangements
• You want flexibility around where you live
• You want to start investing in property without buying your own home first

Whether it makes sense depends on your circumstances, goals and finances.

 This is the part you want to understand before buying an investment.

Being a “first home buyer” doesn’t automatically mean eligibility for every first home buyer scheme or concession.

Different government programs have their own eligibility rules, which can include requirements around:

• Previous property ownership
• Whether the property is lived in
• How long it is lived in
• Property value
• The type of property being purchased

Buying an investment property first could affect eligibility for assistance that may otherwise have been available.

So before jumping into an investment purchase, it’s worth understanding what could potentially be given up.

 Yes.

If a property is being bought to rent out rather than live in, the lender will generally assess it as an investment loan.

There can be differences in:

• Interest rates
• Lending criteria
• Deposit requirements
• How rental income is assessed
• Loan features and structure

Potential rental income may be included when a lender assesses borrowing capacity, but lenders generally won’t count every dollar of expected rent.

 An investment property comes with costs and responsibilities beyond the home loan.

These might include:

• Property management fees
• Council and water rates
• Insurance
• Repairs and maintenance
• Strata costs for some properties
• Periods without rental income
• Tax considerations

It’s also important to think about how buying an investment now could affect the ability to buy a home later.

That doesn’t make buying an investment first good or bad.

It just means the numbers need to make sense for the situation.