12 Aug Should You Buy Your First Home or Invest on a Property Instead?
Is it better to purchase your first home or should you be putting your money on property investment?
Many Aussies first time property buyers are choosing to become property investors and continue to rent. This trend is also known as “rent-vesting,” which suits a lot of the millennial market. This gives them flexibility in terms of their preference where to live while growing their wealth. First home buyers, on the the other hand, buy their home instead and live in it until they may be able to afford an investment property.
So which one floats your boat?
First Home or First Property Investment
If you’re starting a family and already did your market research, then it’s better to push your dream of owning your first home. You can take advantage of the First Home Owner’s Grant and easily settle in your first home with your growing family. This is not to say that you’re completely removing investing in the picture. You can still build equity in your current home and if by the time you wish to purchase again, you may be able to secure a home equity loan.
Renvesting has been a trend now because it is attractive for many millennials. Most of them want to live close to the city where property tends to be really expensive. So in aiming to grow their wealth, they resort to investing on a property that they can afford while renting a place near their workplace.
Tips for Young Investors
- Think of your main goal. Decide on what age you want to achieve financial independence and determine whether you need a mental shift.
- Seek the help of your accountant, real estate broker, and finance broker. They can help you understand the risks involved and advice you on which is the most strategic way in getting into the property ladder.
- Do your research. Ask someone who has been rentvesting to get a good grasp of the whole journey and process.
Steve Waters brilliantly put this in his article, “There will be a million arguments as to why you should rentvest and then another million as to whether you should by a home – but the real danger is doing nothing.” So if you’re reading this, congratulations! It means you are one step closer to owning your first property and you’re serious about growing your wealth. Buying your first property helps you build confidence and gives you great advantage in building your portfolio.
As your finance broker, I can help you secure a loan that fits your financial situation. That way, you are more than motivated to continue investing and saving for the future.
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