Five Reasons to Buy an Investment Property Before Your First Home
When it comes to property ownership, many people think the first step is buying a home to live in. But for those ready to think outside the box, purchasing an investment property first—known as rentvesting—could be the smarter financial move.
With house prices continuing to rise in major cities, it’s never been more important to get creative with how you enter the property market. Here’s why rentvesting might just be the game-changer you’ve been waiting for:
1. The Power of Good Debt vs. Bad Debt
Investment properties are considered good debt—they generate income through rent, provide tax deductions, and typically appreciate in value over time. In contrast, owner-occupied homes can create bad debt as they drain your resources without producing income. By investing in property first, you can improve your financial position and increase your borrowing capacity.
2. Financial Flexibility Through Rentvesting
Rentvesting gives you the best of both worlds. You can rent in an area you love, where you might not be able to afford to buy, while still owning an investment property in a more affordable location. This strategy lets you enjoy your lifestyle while building wealth, without overextending your finances.
3. Easier Market Entry
Investment properties often come with lower entry prices than owner-occupied homes in desirable areas, making it easier to get into the market sooner—especially in cities where prices have surged. Starting with a more affordable property allows you to build equity faster, putting you in a stronger position for future investments.
4. Tax Benefits and Positive Cash Flow
Investment properties offer tax advantages that aren’t available with owner-occupied homes. You can claim deductions on mortgage interest, property maintenance, and depreciation. With rental income flowing in, these benefits can create a positive cash flow, making it more affordable to hold onto your property for the long term.
5. Focus on Growth Potential
When you buy an investment property, you can focus purely on its growth potential—without getting caught up in emotional decisions. You’ll have the freedom to choose locations with strong infrastructure, consistent capital growth, and gentrification potential. This lets you make strategic, objective decisions that align with your financial goals.
Rentvesting could be the strategy that helps you build wealth sooner, without sacrificing your lifestyle. If you’re ready to take control of your financial future, consider taking the first step with an investment property.
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