Investment properties a stepping stone
ANNELI KNIGHT www.stuff.co.nz 19 Jan 2011
Soaring property prices have made it difficult for many first home buyers, but there is another way to enter the property market. Buying an investment property before your first home is a good way to start building an asset portfolio to help you get ahead.
Michael Furlong, director of MAP real estate, was renting until last year, when he bought his first home at the age of 39. However, his first home was not his first time in the property market; he had bought and sold 18 properties before finally buying his dream home. He says there is a big difference between being a renter and a renter who is also an investor.
“The way you win is to have all of your money work for you throughout that phase that you’re still renting. The term I use is a ‘professional renter’,” he says.
Furlong says there are many reasons why it can be a good strategy to buy an investment property before your home.
“You’ll be able to afford to live in a much better property as a tenant than what you could if you were to buy it – we were living in a A$700,000 or A$800,000 property and only paying A$550 a week [in rent]. As a professional renter you’ve got a much better property for a smaller amount of money for your own personal use.”
Furlong says it also doesn’t suit many people to solidify their first home until their late 30s. …
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