Is purchasing your own home the same as buying a rental?
Buying a house for you to live in and buying an investment property are two very different purchases.
Your motivation for buying one property over another is very different. One, you listen to your heart and follow your emotions, the other is purely a financial decision.
When you are buying your own home, you have a personal wish list that you want to achieve – or as close as you can. Maybe you want to live in a certain area, with a minimum number of bedrooms and space with all of this coming within budget.
With an investment property, all that matters is finding a property that is in demand that will increase in value over time. So it doesn’t matter what you personally think of the property, it’s about how easy it would be to rent out, how easy it is to maintain and how much it will increase in value over time. So it doesn’t matter if it has 3 bedrooms instead of 4 and there isn’t much of a backyard, because the rental yield looks fantastic, and the value of the property is on the up and up.
So make sure that when you are looking at property that you have the right ‘hat’ on. Ask yourself a few questions:
- Is this property purchase about my financial future or is it about my day-to-day life?
- What do I want this property to do for me in the long-term?
- Am I going to live here?
An investment property will take extra work to find. The best ones are usually in popular suburbs, are close to amenities such as transport, schools, restaurants, employment and parks. Which means competition to find these properties will be fierce.
Buying an investment property is quite different from buying your own residence. You need to approach it differently and always keep in mind, it’s not about you, it’s about other people who will be living in it.
What do you do differently when purchasing your own home compared to buying an investment?