Using an Investment Property as Your Main Residence: Is It Possible?

Using Investment Property as Main Residence: Factors to Consider

From potential tax benefits to stability and rental income, using investment property as the main residence has several advantages. However, evaluating some important factors is essential to make informed decisions.

1. Consider Mortgage Implications

Examining how it influences the mortgage terms is vital when using an investment property as the main residence. If you utilise the home as your primary residence, you can pay a higher interest rate on your mortgage. Properties being used as main residences but primarily mentioned as investment properties may have certain criteria. So, engaging with a lender in advance is important to avoid any critical mortgage implications.

2. Tax Implications

Investment properties are subject to various taxes such as the capital gains tax and rental income. Understanding the tax implications is ideal before turning your investment property into a main residence. If you make money on the sale of the property, capital gains tax can apply. You might have to pay rental income tax if you keep renting out a portion of the property.

3. Lifestyle Considerations

Think about whether the location of the property fits your demands and way of life. Examine whether the area has access to schools, transit, and other facilities. Research the neighbourhood and if it suits your tastes. Considering lifestyle desires and needs is essential to choose the right type of property.

4. Legal and Regulatory Requirements

Several legalities are associated with investment properties and taking account of their requirement is suggested. Verify that the land is permitted for residential use and that the required planning permissions are obtained. Learn about the pertinent landlord and tenant legislation if you intend to rent out a portion of the property.

5. Insurance Considerations

Different types of properties require different insurance plans. For the property, homeowners insurance will be required. To safeguard your investment, think about getting rental insurance if you intend to rent out a portion of the home.