QUESTION: I’d like to own my own unit but the figures just don’t add up. Anywhere I might be able to afford isn’t as good as the place I’m renting (I work from home and need the extra room). Meanwhile property prices keep going up and I have less and less chance of joining the market. How can I avoid being left behind? – Jarvis, Maroubra.
ANSWER: You can rent better places than you can afford to own because of negative gearing tax breaks on investment properties so how about buying somewhere to let out but living right where you are?
If you buy a unit, there’s the cost of your mortgage, council rates, strata levies and stamp duty to consider. But if you rent it out, you can claim a lot of those costs against tax (although you’ll have to pay tax on any profit you make when you sell it).
By the way, if you are using a room in your rented property exclusively for work, you can claim part of your rent against tax too.
Talk to a financial adviser or accountant about how to structure your finances then buy the best place you can afford in an area of high rental demand.