Can a First Home Buyer Buy an Investment Property?

can a first home buyer buy an investment property

Buying your first investment property is possible even after being a first-time homeowner. You only need to figure out your finances and ability to sustain both investments. Usually, homeowners are eligible for home loans. These loans have lower interest rates as they’re considered less risky. However, you cannot use a home loan to finance an investment property.

Buying Your First Home As an Investment Property

It is possible to buy your first home as an investment property. However, this approach can mean you will lose access to most funding options available for first-time home buyers who intend to live in their homes.

Home loans, for instance, cannot be used for an investment property. If you want to start renting out your home while on an owner-occupied home loan, you must notify your mortgage provider for a change to an investment loan. Renting a house on such a loan could result in fraud charges.

Why Purchase an Investment Property?

Real estate is one of the best asset classes in the country. Historically, real estate has offered increasing returns for investors. In addition to returns such as rental yields, investing in property gives you equity to leverage to further invest in property. This leverage has provided real estate investors with a solid wealth-building strategy. Property investments can have big short – and long-term rewards when managed under a strong investment strategy.

Property is a tangible asset, which can give you more control over your investments. Compared to stocks or intangible assets, real estate can be seen, its problems assessed on-site, and its status reviewed. You can make tangible adjustments to your property and measure the impact of these adjustments. This can give more conservative investors peace of mind. Investing in property can be a source of predictable passive income.

Rental yields are a popular reason for investing in property. While rental income may vary depending on the vacancy rates and recurring costs, it’s still profitable to get into when done right.

buy investment property

Protecting Your Home

Equity is one of the reasons many Australians buy homes. Such equity can be helpful when you want to renovate your house or sell it for a profit. Some investors also use their home’s equity to finance their investment properties. This allows you to leverage the value your home has gained to invest in a new property.

However, using your home as security for a property investment loan could be risky. Since lenders in Australia consider property investing riskier, they charge higher interest rates. These interest rates could result in the loss of your home if your investment doesn’t work out as planned.


Investing in property can be a lucrative venture even for first-time buyers. That said, not all properties are made equal. Take your time before investing to learn about your financing options, protect your existing assets, and choose the best property. Approach property investment as you would approach a business.

This means understanding your target customers, their needs, and preferences in terms of housing. Finally, have financial management to help you balance your living expenses, other investments, and market downturns. 

Enquiry Form