Should your first home be a residential investment property?

We've all heard the stories: The lucky investor who makes it big time in the property market, making a killing and becoming the next real estate mogul. The reality is that not everyone is going to become a millionaire from investing in property and, really, you don't need to be! The path to financial freedom depends on your unique goals and circumstances.

In fact, as an ambitious first home buyer, you might even be weighing up whether your initial purchase should be a residential investment property. Let's take a step back for a second and look at whether this could work for you.

You can save for your own home

Making your first home an investment property could give you access to a steady stream of cash, something that doesn't go amiss when you're saving for your own home! In fact, while you're leasing a property out to others – and granted that the home is earning enough – you could use the rental income to cover your mortgage repayments.

That's not the end of it. Even if your income doesn't make quite enough to cover the expenses, you'll also get all the benefits of negative gearing, too. You can claim the interest on your loan as a deduction when you file your tax return, as well as any of the expenses for repairing and maintaining the property – these are benefits you just can't get as a regular home owner.

Ready, steady…

Just keep in mind you'll need to have your finances in good nick to purchase the property in the first place. Keep in mind, as well, that whereas you'd be able to use the government's FirstHome grant if you were buying a property to live in, you won't be eligible for it when purchasing an investment property. 

That's why working with an Authorised Financial Adviser, like us here at Goodlife, can be a fantastic road to take. Whatever stage you're at, you can use helpful property advice to figure out the course of your own journey – especially if you're just starting out in the real estate market.

Here's to your financial independence!

Daniel Carney
Authorised Financial Adviser / Investment Property Expert

Contact us now!

0508 GOODLIFE
info@goodlifeadvice.co.nz