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Is Rentvesting Right For You?

For many years it has been common practice for Australians to purchase a home to live in first before ever considering the purchase of an investment property. Nowadays, however, many young first home buyers have been bucking this trend by choosing to continue to live in a rental property and purchasing their first home as an investment. This practice is known as ‘Rentvesting’.

Rentvesting refers to the trend of home buyers preferring to purchase their first home as an investment, rather than to live in, whilst still living in a rental property themselves. Rentvestors, as the buyers are referred to, are typically young first home buyers who are taking advantage of Australia’s property market and keen to start building and creating their investment portfolios and their wealth.

Buyers who have not yet purchased their own home to live in have account for an estimated one third of investors indicating that many young Australians are choosing to rent with friends or stay at home with their parents a little longer in order to enter the property market.

The Rentvesting strategy provides first-time buyers with many benefits, both financial and non-financial including the following:

  • Buyers may receive all the tax benefits of a property investor, including Depreciation and Negative Gearing

  • The rent received from the investment goes towards the loan repayments and can, at times, be enough to cover the mortgage

  • The investor is provided an opportunity to get their foot in the door of the property market

  • By renting, the investor can live where they want and in their ideal location where they can afford the rent but not necessarily afford to purchase a home in that area, i.e. Close to the CBD

  • Renting also provides the young investor with the flexibility of extended travel or relocation

Rentvesting may not necessarily be a new concept but it is one that is gaining increased popularity as investors take advantage of the benefits of this strategy.

If you'd like to know more about Rentvesting, or other useful strategies to help get started with your property portfolio, contact us today.

DISCLAIMER: This article provides general information only and may not reflect the publisher’s opinion. None of the authors, the publisher or their employees are liable for any inaccuracies, errors or omissions in the publication or any change to information in the publication. It was prepared without taking into account your objectives, financial situation or needs. Please consult your financial adviser, broker or accountant before acting on information in this publication. Please click here for disclaimer information and terms of use for this website and terms of use for this website and all our associated media as well as information regarding to links to 3rd Party / External websites that are not related to APLS Finance Solutions.

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