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Saving a deposit and buying your first property is a dream held by many Australians. But that first property doesn’t have to be one that you move into and live in.

One alternative is to buy an investment property. This can help you get a foot on the property ladder while you continue to rent or live at home.

Which is right for me?

Choosing between a home and an investment property will depend on your personal circumstances and the property you’re thinking about buying. Consider your financing options, including investment home loans and fixed rate or variable home loans.

Benefits of buying an investment property

Tax benefits are one potential benefit of owning an investment property. As part of a negative gearing strategy, you may be able to claim deductions on your maintenance costs and other outgoings such as repairs, mortgage interest and rates.

Another benefit of continuing to rent is that you may be able to live in a better property or area than you could afford to buy. Rents in high-end homes tend to be less than your mortgage repayments would be should you buy that home. So you could buy your investment property in a more affordable suburb while continuing to live in your preferred area.

Benefits of buying a home

There are of course many benefits to living in your own home.

Being able to renovate to suit your tastes and needs, having security of ownership, and feeling a sense of pride in your home are important factors to many people.

How does buying an investment property differ from buying a home?

When searching for an investment property, rather than looking for a home that you want to live in, you should search for a property that will be popular with the type of tenant in that area. Transport links, proximity to good schools and rental demand for that area are often important considerations.

Instead of looking in a suburb you might want to live in yourself, consider a suburb that offers the potential for good capital gains and/or high rental returns. Our complimentary Property and Suburb Reports provide the latest information on new listings, auctions, recent sales and suburb profiles.

How much can you borrow?

Our home loan borrowing calculator can help you work out how much you might be able to borrow, while our repayments calculator can help you understand what your repayments would be.

Whether you want to buy a home or an investment property, use our Budget Planner to help you work out how much you could afford to repay each month.

Book a time with a Home Lending Specialist to discuss buying your first home or investment property

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Things you should know

The Australian income year ends on 30 June. You have from 1 July to 31 October to lodge your tax return for the previous income year. If you use a registered tax agent to prepare and lodge your tax return, you may be able to lodge later than 31 October.

It’s important to remember that tax laws are complex and you should ensure that you understand the tax implications of asset ownership before you decide to invest. This guide is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek professional financial, legal and tax advice before making any decision based on this information.

Commonwealth Bank is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

Loan applications are subject to credit approval and any loan offer includes full terms and conditions. Fees and charges apply – see our fees and charges brochure.