Ask Michael Anything [video] – To buy a first home or investment?

Making the right decision on your first property purchase plays a huge part in your property investment journey.

This week watch Michael answer a question surrounding buying your first home versus your first investment.  economy property market grow wealth house dream first home

This week’s question: 

Michael, does it make sense to buy my first home before investing in property?

Ben, Darebin vic

Please leave your question in the comments section below and we’ll answer it.

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'Ask Michael Anything [video] – To buy a first home or investment?' have 5 comments

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    January 18, 2017 @ 1:38 pm Alex

    When the family has to relocate, when does it make sense to turn a family home into investment property and when selling it would be a better option? thank you


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      January 18, 2017 @ 9:25 pm Michael Yardney

      Alex that’s a great question. There is no simple answer as there are so many individual factors to consider. Firstly is it an Investment grade property in a good location. What else could you do with your money etc etc.


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        January 18, 2017 @ 11:40 pm Alex

        Yes, Michael, common investment-grade criteria would apply. There are however several unique factors to consider – and I wanted to learn more about them! 1) Finance – family home typically has lower mortgage balance left than on investment property – will the home be inevitably positively geared? 2) Family homes are likely to have luxury fittings which would be typically considered as over-investing for rental property – will rent cover its depreciation? 3) Would costs of recent improvements (e.g. new kitchen or new aircon) be still deductible within the depreciation period if they were installed while still owner-occupied? 4) saving on costs of selling and stamp duty if the property is retained. – In summary I wanted to learn about unique factors when the family home is turning to investment property. Thank you!


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          January 19, 2017 @ 3:09 am Michael Yardney

          It looks like you’re looking for very specific advice about your particular circumstances and it would be wrong for me to “advise” you over the internet in such an important decision, that’s why we have set up Metropole Wealth Advisory – where Ken Raiss can run the numbers specifically for your situation.
          It all comes back to the numbers doesn’t it? Considering the potential sums of money involved, it makes sense to spend an hour of your time and chat with him- you can organise this by clicking here.
          And yes – you can depreciate the aircon and other items that were initially paid for as an owner occupier.
          It’s an interesting exercise – but one that’s worth exploring esp since there are also CGT implications


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            January 20, 2017 @ 9:08 am Alex

            Thanks Michael. This was indeed my personal dilemma a few years ago. Rightly or wrongly I sold (given the time pressure) and I wanted to re-analyse the situation to learn my lesson. Since this question is not unique to me I hope I will see a general discussion article on propertyupdate portal later. I will contact Metropole when I need a specific advice on my personal matter. Regards

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