Should I Buy My Own Home First or an Investment Property?

Why read this article

Home or investment first?
This article helps you weigh up whether to buy your own home or an investment property first.

• Learn the difference between emotional and financial choices.
• Understand how equity and leverage can build wealth.
• See how property advisors structure long-term strategies.

For many Australians, the dream of owning their own home comes first. It’s tied to security, family and lifestyle. But with property prices continuing to rise and the financial landscape changing, more people are asking: should I buy my own home first, or should I purchase an investment property?

At Accrue Real Estate, we often hear this question. The right answer depends on your goals, priorities and personal circumstances. Understanding the trade-offs can help you make a more informed decision.

 

The emotional pull of the family home

Buying your first home is often seen as a major milestone. It can provide stability and a sense of security. However, from a financial perspective, a home is generally a non-income-producing asset. Mortgage repayments, maintenance and interest costs can add up, and while your home may increase in value over time, it does not generate rental income or provide investment-related tax benefits.

This is why many property investment advisors encourage Australians to consider whether building wealth first through investment property could help them achieve their longer-term goals.

 

The investment property advantage

An investment property can offer several advantages, including:

• Rental income that may help offset holding costs.
• Tax benefits, including negative gearing where applicable.
• Leverage, with lenders often willing to lend up to 80% of a property’s value.
• Potential for capital growth over the long term.

With $100,000, an investor may be able to control a $500,000 asset. Assuming average growth of 5% per annum, that property could be worth approximately $814,000 after ten years, while rental income may assist with holding costs.

Under proposed Federal Budget changes, eligible new-build properties are expected to remain an important consideration for investors, as Government policy is increasingly focused on supporting additional housing supply. As a result, many investors are paying closer attention to newly constructed and investment-grade properties.

No wonder leading property investment companies in Australia, including Accrue Real Estate, continue to focus on long-term property fundamentals and opportunities available through quality new-build properties.

 

Using equity to your advantage

If you already own a home, you may be able to access some of the equity built up in that property to help fund an investment property.

For example:

• Your home is worth $800,000.
• Your mortgage balance is $400,000.
• The difference represents $400,000 in equity.
• Subject to lender requirements, a portion of that equity may be used as a deposit towards an investment property.

This strategy is commonly used by investors who see equity as a bridge between home ownership and long-term wealth creation.

 

The trade-offs to consider

There is no single right answer. The decision often comes down to your priorities.

Home first
If stability, lifestyle and having a place to call your own are most important, purchasing your home first may provide peace of mind.

Investment property first
If your objective is to build wealth, generate income and take advantage of leverage, purchasing an investment property first may help accelerate your position.

Either approach can be appropriate depending on your circumstances, goals and risk tolerance.

 

Real-world example*

Let’s assume you purchase a $500,000 investment property using a $100,000 deposit and a $400,000 loan. If the property’s value grows at an average rate of 5% per annum, after ten years it could be worth approximately $814,000. This represents around $314,000 in capital growth before costs, taxation and other expenses.

By comparison, putting the same $100,000 towards a family home may provide lifestyle benefits, but it does not generate rental income and generally does not provide the same investment-related tax benefits.

 

Final thoughts

Whether you decide to buy your own home or an investment property first, the most important factor is ensuring the decision aligns with your goals and circumstances.

For many Australians, property forms the foundation of a long-term wealth strategy. Having access to research, experience and a clear understanding of the market can help you make more informed decisions and avoid costly mistakes.

How Accrue Real Estate Helps