Buying an investment property is treated differently from buying a home to live in. Banks count the expected rent as income, which can help your borrowing capacity. You can claim deductions such as loan interest, running costs and depreciation, but you'll pay capital gains tax on any growth when you sell. A home you live in is generally exempt from capital gains tax.

In this video, McKern financial adviser Shahin Tehrani compares the two options, including 'rentvesting' (buying an investment and renting where you live), which can come out ahead on cash flow. He explains why he chose to buy his own home first, and how to plan for rate rises: trimming spending to prioritise repayments, or taking in a boarder, and the trade-off between lifestyle and privacy.

In this video

0:00 How banks treat investment vs owner-occupied property

0:31 Tax differences and capital gains

0:54 Buying to rent vs buying to live in

1:55 Planning for interest rate rises

General information only, not personal advice.