Home Purchase
Purchase Price    $300,000
Loan (95%)         $285,000     (this assumes you have a 5% deposit available)
Repayments                $2,293 per month     (assume 9%, 30 year term)
Plus other costs        Rates        $120
                               Insurance    $50
Total cost                    $2,463
To own this home you will need $2,463 per month.
Rental Purchase
All the same figures above, but by following the example from the article on 'how does property investment work?'
You would have a monthly cash shortfall of $715
Personal rent    $400 per week
Total cost        $1,115 per month
DIFFERENCE        $1,348 per month

This means in essence for the same as a home loan repayment you could fund 2 rental properties.
Note - Assuming a tax bracket of 33% you could also get a tax refund of $566 per month.
BUT - owning your home can give you stability, and security.
There are of course financial risks to property investing, so you must research to decide whether investing is an option for you.
There is no right or wrong answer to this question, everyone is different and has different goals. Good luck on your property purchasing journey!

At Connect Mortgages, we have many clients who want to invest, but feel that do not have the knowhow to follow through, we have a team of experienced brokers to help work out your affordability, PLUS an experienced property mentor who can teach you all you need to know about property investing.

Article by Tracey Munns

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