Should I buy an investment property or should I buy a property to live in for myself?

Q.

I am 32 years of age and my gross income is $150,000. I am able to salary sacrifice $30,000 to super and $37,000 in company shares - tax free for 10 years. This leaves me with an income of $83,000. I have $150,000 invested in managed funds and shares, and I am currently renting for $220 a week. I would now like to get into the property market to diversify my investments. Should I buy an investment property or should I buy a property to live in for myself - or should I wait till the end of 2008 to see which way the market will go if interest rates increase some more? I would like to buy for long term growth in a major city somewhere, to assist me eventually buy my dream home for myself.

If your mission is to own the dream home, I suggest you buy a property sooner rather than later as it will be free of capital gains tax, and also give you free rent. It will also give you great experience in researching the market and finding an undervalued property.