Buy to live-in or buy to invest?
| Should your first property be to live-in or as an investment? |
I am just about to buy a house and I am tossing up between buying a cheap investment property with a high yeild or buying a little bit more expensive house to live in. FOr the moment I am renting.
I can't decide what which way to go. A house to live in would mean that I do not need to go through the hassles associated with renting like moving all the time, bad land lords, constant inspections, etc.
I can find livable houses near by where I currently rent for about $280k. These arn't houses, they are more like town-houses or units.
I can also find investment properties far away from where I live at about $120k that have a yeild above 10%. Some peoperties return cash clear after all expenses and tax.
I could pay off a $280k house in 7-10 years or pay off the investment property in 3-4 years.
What should a first time buyer do in this sort of situation.
Any comment
Does anybody have a view on this.
Just after ideas not a serious solution
Invest now
Go for the investment property.
With 10%+ return you should be fine. Just don't leave it too long to pay off. 4 years is okay but 10 would be devastating and risky.
reading a book on starting property investing
I was just reading a beginners book on property investing the other day and there was a chapter all about your specific question so I thought I would summarize a few points here.
If you are young, move round a lot, don't like garden care or maintaining a property, then buying an investment property first will be a reasonable choice.
On the other hand, if you are steady, married, and don't see yourself moving then buying a house to live in will get you off the rental merry-go-round. Your local government may also offer incentives for first home buyers that buy a property to live in, not as an investment.
As always, check with your local council rulings on benefits, don't take my word for it, I am not an expert 
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