This is a personal story of mine. When I first started thinking about property, I was eager to dive straight into the world of investments. Like many Australians, I had big dreams of building a portfolio, generating passive income, and achieving financial freedom.
But one piece of advice from my accountant completely changed how I approached property—and it’s something I now share with every first-time buyer I meet:
“Make your first property your home. Live in it. Pay it down. Then think about investing.”
At first, I didn’t get it. Wouldn’t I be missing out on all those tax benefits investors talk about? Wouldn’t it slow down my wealth-building journey? But once I understood the reasoning, it made perfect sense.
1. Your Home Sets the Foundation
Owning your first property as an owner-occupier gives you stability and security. It’s not just about having a roof over your head—it’s about establishing financial discipline.
When you live in the property, every dollar you put toward your mortgage is building your equity. That equity becomes the launchpad for your future investments.
If you start with an investment property, your borrowing capacity can be stretched thin, and your cash flow can come under pressure from the start. By focusing on your own home first, you strengthen your position with the banks and create a solid financial base.
2. There’s No Substitute for Paying It Down
Your accountant probably knows what many people forget: debt reduction is a guaranteed return.
When you make extra repayments on your home loan, you’re effectively earning the same return as your mortgage interest rate—risk-free. For example, paying off a 6% loan is like getting a 6% return on your money, without worrying about market ups and downs.
By paying down your owner-occupied loan, you’re also freeing up future borrowing capacity. Once your mortgage balance drops, the bank sees you as a lower-risk borrower, which makes it much easier to secure funds for an investment property later.
3. Smart Leverage Comes Later
Once you’ve built strong equity in your home, you can use it as leverage for your next purchase—an investment property.
The difference is that now, you’re entering the market from a position of strength. You’re not overextended, your cash flow is healthier, and you have real assets backing you up.
This is the strategy my accountant encouraged:
- Buy a home you can afford and love living in.
- Focus on paying it down aggressively.
- Use the equity later to fund smart investments.
It’s simple, sustainable, and powerful.
Client Story
Having an owner occupied home with too much debt is unfortunately a scenario I see with a lot of clients. It means unable to refinance when needed due to not having any equity, being trapped in your job just to make repayments and ultimately living a life that you don’t want to live in. The advise I received of having a strong owner occupied home is truly one of the best pieces of advise I have receivied.
Final Thoughts
It’s easy to get caught up in the excitement of property investing and forget the basics. But the truth is, your first home is your foundation—not your forever home, and not your last purchase, but the stepping stone that will make every other move possible.
The advice I got from my accountant wasn’t flashy or complicated, but it was the best financial guidance I’ve ever received:
Start with your home. Build equity. Then invest.
Yes this won’t apply to everyone – such as those who move frequently for work, But it does for the vast majority of people.
