PPOR or investment

Hiya and welcome aboard.

It's always great to see another Canberran on the forum

Pesonally, I wouldn't bother with purchasing new in the ACT – the concessions look attractive but I doubt you'll gain much growth from the property in the short to medium term due to the abundance of new stock on the market.

A lot of my clients do both – that is, they purchase a PPOR and then use it to leverage into purchasing IPs.

Some do it by purchasing an established property, carrying out cosmetic renos – have it revalued and access the newly created equity to fund an IP purchase or two.

With your $100k – you could potentially spread that over a couple of purchases.

Anyways – I'm just typing out aloud. It's food for thought.

Cheers

Jamie

mbsuper,

Firstly, if you buy an investment property first you won't loose the first home buyer's grant, you just won't be able to claim it for this purchase. You still qualify for it on you home purchase when you are ready to go a head with that purchase.

$100,000 is a good amount to get started with, a $430,000 investment property purchased with todays interest rates will be positively geared by a few $1000 per year. 

To answer your main question: Buying an Investment Property 1st & your own home 2nd OR your own home 1st & Investment Property 2nd ?

The answer is over a $1,000,000 difference to your wealth over the first 10 years of property ownership. 

Renting where you want to live and investing where the market is moving can give you the best of both worlds. The market calls them professional renters for a good reason. We have watched clients doing it the right way time and time again, so we see the results of making the right choice. 

We have a client CJ: 28yo, self employed, single female, earning less than $90,000p.a. living in a rented harbor side apartment (that would be worth $900k+) and pays $350 per week for her share. Living the good life and while saving a bit too. She made her first investment 5 years ago, then another one 3 years ago. Both were positively geared and being positively geared has meant she has been free to continue her savings plan. Over the last 6 months CJ has bought another 2 investment properties with us. One is an 2 bedroom apartment and the other is a 4 bedroom house. That brings her number of properties to 4, 3 houses and 1 apartment. After Christmas CJ told us she going to revalue them in June/July and look to buy again later in the year. 

Her main advantage is all her properties are positively geared. She plans to buy 2-3 more investment properties before she buys a own home.

CJ will be able to retire at 45 on over $2000p.w. investment income. 

If you delay buying your own home and invest first, your ability to continue buying (serviceability) is going to let you grow your wealth much, much faster. Once you take the luxury of moving into your own home (PPoR), you holt your ability to save and it often takes 5-10 years before there is enough spare money to start saving for that next property. The outcomes are as different as black and white OR you could say; well over a $1,000,000 in wealth.

You will get there if you start with a simple strategy and work towards a clear goal, as this quote sums up:

“You’ve got to think about big things while you’re doing small things, so that all the small things go in the right direction.”― Alvin Toffler

I spend 50% of my week, working with propective clients to help them get their strategy right. When they have their strategy in place, they tell me that they find investing less confusing, just as Alvin Toffler's quote puts it.

We have a couple of Western Australian suburbs in our top 100 list, but nothing in WA that currently ranks in our top 5. Having said that, our lists mainly cover metro and near metro areas.