First Home Buyer Guide Episode 1: Owner-Occupier vs Rentvesting and the Hidden Costs of Buying a Home Sydney
- Lenny Briffa
- Mar 30
- 2 min read
Updated: Jul 24
Owner-Occupier vs Rentvesting: Which Path Is Right for You?
Before you start inspecting properties, there's a bigger question worth answering first: do you want to buy a home to live in, or buy a home to rent out while you keep renting where you actually want to live?
Buying as an owner-occupier means you live in the property yourself. Your mortgage repayments go toward a home that's genuinely yours, any government first-home-buyer grants and stamp duty concessions typically apply, and the home is fully exempt from capital gains tax when you eventually sell.
Rentvesting means you buy an investment property somewhere more affordable, rent it out for rental income, and continue renting yourself in the suburb or lifestyle you actually want. The appeal is simple: you get onto the property ladder and start building capital growth, without giving up the lifestyle a more expensive suburb offers.
There are trade-offs either way. Rentvesting can mean giving up first-home-buyer grants (since the property isn't your primary residence), and it comes with landlord responsibilities - things like council rates, ongoing maintenance, and management fees if you use a property manager. On the other hand, some buyers find rentvesting is the only realistic way to build wealth and grow a property portfolio in the current market, without waiting years longer to save for a home in their ideal suburb.
Neither option is universally "right" - it depends on your income, your goals, and how much you value living in a specific location right now versus building a properties investment portfolio for the future.
The Hidden Costs of Buying a Home in Sydney
The purchase price is just the headline number. Once you dig into the upfront costs of buying a home in Sydney, the real total is often tens of thousands of dollars higher.
Here's what to budget for:
Stamp duty: varies by property value and whether you qualify for a first-home-buyer concession or exemption.
Conveyancing and legal fees: typically $1,500-$2,000 to have a solicitor or conveyancer manage the legal transfer of the property.
Building and pest inspections: a pest inspection and building inspection, usually combined, typically cost $500-$800 and can save you from buying a property with hidden structural or termite damage.
Lenders Mortgage Insurance (LMI): if your deposit is below 20%, LMI protects the lender (not you) and is usually added to your loan amount rather than paid upfront.
Council rates and ongoing costs: once you own the property, council rates, water rates, and (for apartments) strata fees become part of your regular budget - not just a one-off cost.
If you're buying via private treaty (a standard negotiated sale, as opposed to auction), you'll usually have a short cooling-off period to finalise these checks before you're fully committed - which isn't the case if you buy at auction.
It's also worth factoring in current interest rates when budgeting, since your mortgage repayments - not just the upfront costs - need to comfortably fit your monthly budget long after settlement day.
This is Episode 1 in our First Home Buyer video series. Continue on to Episode 2: Choosing Loan Features, or jump to Episode 3: Your Borrowing Power.
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