When you buy your first home, it's often with the idea of living in it for a while and then perhaps upgrading to a bigger or better home. But what if you could keep your first home as an investment property and rent it out instead of selling?

It's not a decision to make lightly, so get professional financial advice tailored to your unique circumstances. In the meantime, here are some things to consider when thinking about whether to rent or sell. 

Why holding property can work out for the best

If you have the financial capacity to take on a second mortgage and the costs associated with owning another property, you might consider keeping your home and turning it into an investment property.

If your rental income covers all your investment property costs, you could generate some passive income. A financial adviser or tax professional can also help you work out if you might be able to take advantage of tax benefits associated with property investing, such as negative gearing.

And when you do eventually decide to sell an investment property, you might be able to command a higher price if the property is already set up as a rental and generating reliable income from long-term tenants. 

Why selling often makes sense

Transforming your home into an investment property might sound like a good idea, but it’s always smart to look at the other side of the fence. Renting rather than selling means:

• no lump sum of cash that can be used to help pay down the principal on your new property’s mortgage
• ongoing maintenance, insurance and other property investment costs
  
• having to worry about finding reliable, trustworthy tenants.
  

As you can tell, there’s a lot to consider, so always seek professional advice for investment decisions or tax concerns. Financial professionals can help you crunch the numbers on your home equity, income, savings, debt and expenses. They can also talk about your financial and lifestyle goals, and give you a better overall sense of what’s right for you.

Speak with a home lending specialist

To find out about your borrowing capacity, and for answers to any questions about home loan financing, Suncorp Bank is here to help. Get in touch today for an obligation-free consultation with one of our home loan experts.

Talk to a home loan expert

Published 14 November 2022