Should You Buy a First Home in the Northern Rivers or an Investment Property Inland?

I've spent the better part of three decades managing rentals in the Northern Rivers, and I've seen this exact question play out more times than I can count. A young professional, good income, first-home dreams, and an "investment house" whispering that the real money is inland in rural Victoria. Let me walk you through what I'd tell a friend.

The inland investment pitch deserves a healthy dose of skepticism

When someone who makes money selling investment properties tells you to buy a specific property hundreds of kilometres from where you actually want to live, I'd want to know exactly how they're getting paid. In my experience, some so-called investment advisers earn commissions or developer kickbacks for moving stock in regional markets that are otherwise hard to shift. That doesn't mean it's a scam, but it does mean their advice isn't neutral. Buying a first home in the area you love is rarely a financial mistake, even if the yield isn't as flashy on a spreadsheet. Your home is more than an investment—it's where you build a life. And as a landlord, I can tell you that managing a property you've never seen, in a town you'll never visit, is a recipe for stress and surprise repair bills.

The first-home buyer schemes are not a gimmick

If you're eligible, the First Home Guarantee and state-based stamp duty concessions are genuinely valuable. I've watched buyers save tens of thousands on stamp duty alone, and avoid paying lenders mortgage insurance (LMI) with only a five percent deposit. That's real money you can put toward the property instead of handing it to a bank or government. The trade-off is that these schemes come with price caps. In the Northern Rivers, $900,000 for a coastal home might push you right up against or over the cap, depending on the current rules and whether the home is new or established. I'm not a lender or a tax professional, so check the thresholds for your state and situation. But the point is: if you buy an inland investment first, you likely burn your first-home stamp duty concession on a property you don't even want to live in. Then, when you finally buy the coastal home you actually want, you pay full stamp duty and possibly LMI. That's a huge financial penalty just to chase someone else's idea of a good return.

Your borrowing capacity is tighter than the glossy brochures suggest

On a $150,000 salary with a ten percent deposit, a decent mortgage broker will typically work up your borrowing capacity somewhere in the $700,000 to $850,000 range, depending on your living expenses, other debts, and the lender's appetite. That makes a $900,000 Northern Rivers purchase tight but not impossible if you have no other commitments. A $700,000 inland home gives you more financial breathing room, but you're still paying for somewhere you don't live. What many first-home buyers miss is that some lenders will count future board payments from housemates as income. In my property management days, I saw plenty of owners offset their mortgage with one or two flatmates, sometimes covering a third of the repayments. But here's the catch: that board income is taxable. In Australia, rent received from housemates is assessable income, even if they're friends. You can claim a proportionate share of expenses like mortgage interest, council rates, insurance, and utilities, but you must declare the income on your tax return. Get a good accountant before you sign anyone up.

My practical advice: buy where you want to live, within your means

If I were in your shoes, I'd focus on the Northern Rivers home you actually want, but I'd also be realistic about price. A $700,000 to $800,000 property in a nearby suburb, or a smaller place that needs cosmetic work, might preserve your stamp duty exemption and First Home Guarantee while keeping your repayments comfortable. Housemates are a fantastic way to make the numbers work when you're young, but don't over-rely on them. Tenants move on, relationships change, and you should be able to service the mortgage on your own income without losing sleep. As a retired property manager, I'd rather see a new landlord buy a modest home they love and learn the ropes with a flatmate or two, than pin their future on an inland "investment" they've never stepped foot in.

That said, every person's tax and borrowing situation is different. Your lender and accountant will give you the precise numbers, but the instinct you've got—to buy your first home in the place you actually want to live—is one I've rarely seen go wrong.