Buying a home to live in and buying a rental property solve different problems. Decide which goal you are pursuing before setting a budget.
Calculate cash flow consistently
For cash flow, subtract operating expenses and the full loan repayment from rent received. Do not deduct loan interest again when it is already included in that repayment. For taxable profit, principal repayments and deductible expenses are treated differently; ask your accountant to prepare the tax calculation.
Choose an asset you can hold
Include purchase costs, vacancy and repairs, not just the deposit. Review comparable rents, building condition and strata records where relevant. Tax deductions do not turn a loss into a profit, and capital growth is uncertain. Use qualified credit and tax advice before committing.
