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My first property: home or investment?

My first property: home or investment?

With the spring buying season approaching, you may be ready to buy your first property. Will it be a home or an investment? We compare the options.

Saving a deposit and buying your first home is a dream held by many Australians.

But that first home doesn’t have to be one that you move into.

Another option is to buy an investment property to get a foot on the property ladder, and continue to rent or live at home.

Which is right for me?

Which scenario makes better financial sense for you depends on your personal circumstances and the property you are thinking about buying. Consider your finance options, including investment loans and fixed rate home loans.

Buying an investment

Owning an investment property might come with tax benefits. You may be able to claim deductions on outgoings such as repairs, mortgage interest and rates.

Another benefit of continuing to rent is that you might be able to live in a better property or area than you could afford to buy.

Rents in high-end homes tend to be cheaper than the mortgage repayments would be if you bought that home. So you could buy an investment in a more affordable suburb but continue to live in your preferred area.

Buying a home

There are also 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?

Searching for an investment property is different to searching for a property to live in. 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 in the decision making.

Instead of looking in a suburb you might want to live in, you could look in a suburb that offers the potential for capital gains or high rental returns. Use our CommBank Property Guide app to search listings and access data on demographics, rental yields and capital growth trends.

Whichever options you choose, the steps to buying an investment property and a home to live in are essentially the same.

How much can I borrow?

Our home loan calculator can help you work out how much you might be able to borrow and what your repayments would be.

Our budget planner can help you work out how much you could afford to repay each month.

Whether you’re looking for a loan for your home or an investment, speak to one of our Home Lending Specialists today.

Commonwealth Bank of Australia ABN 48 123 123 124 This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Property value estimates are provided by an external vendor and are not verified by the Bank. The Bank tries to ensure that content is complete and accurate, but does not accept any responsibility for any losses suffered due to reliance on content. Be aware that estimated values may vary significantly from actual values.