RENTVEST IN YOUR FUTURE

The investment strategy every first home buyer should consider in 2022.

Owning a property to live in was once, and in a lot of ways still is, a cornerstone of the Great Australian Dream. Although, as housing prices continue to skyrocket and dwelling values in several markets across the country are rapidly outgrowing wages increases, the market is moving further out of reach than ever before. This leaves buyers looking for new options to break into the property market, cue – rentvesting.

What is rentvesting?

Rentvesting is the smart property acquisition strategy being adopted by many Australians trying to get their foot in the door of the property market sooner rather than later. Rentvestors are simultaneously tenants at the property they live in and landlords of their own investment property. The property they own might be in a completely different state and may purely be for resale or they could be planning to owner occupy in the future. Either way, there are two types of rentvestors;

1. People who enjoy the lifestyle of where they’re currently renting but cannot afford to buy a home in the area.
2. People who are continuously relocating due to employment or other lifestyle factors, so they may choose to invest in a property but live in short-term rental properties.

Ultimately, rentvesting sees investors rent a property which is host to their desired lifestyle and buy an investment property in a surburb where they can afford home ownership. This strategy cements their place in the property market without sacrificing their lifestyle choice.

Why do people renvest?

The rentvesting strategy is gaining popularity amongst people who want to live in an area that they can’t afford to buy in but have the borrowing capacity to purchase property in a more affordable area. This strategy works well across various income ranges and financially the best results are seen in locations where the difference in rent and mortgage payments is substantially higher.

One of the major benefits of rentvesting is the freedom to live where you enjoy the lifestyle, instead of being forced to live where you can afford. By using this strategy, you fundamentally get the best of both worlds. This is because you are building equity in your investment property which will put you in excellent stead when it comes to your future finances. Investing in property is one of the most popular wealth generation means in Australia. Plus, your maintenance costs and mortgage interest are tax deductible too.

How do you rentvest?

So, how do you start rentvesting? To increase your property portfolio in the smartest way, follow the simple steps below.

1. Do your due diligence on the Australian property market and find areas that have been predicted to grow.
2. Furthermore, research the rental yields in these locations to find out where you can potentially get the best rent return.
3. Save your deposit once you’ve decided on the right price point for you. Then, apply for your loan.
4. Purchase an investment property and hire a property manager to alleviate stress.
5. Make sure the property stays tenanted until you’re ready to move in or sell.

Do you have an investment property but don’t want to deal with the stress of the day-to-day running of your property? Our experienced team of Property Managers are here to help. Contact us today.

Sources: LJ Hooker