Property Sep 6, 2021

What is Rentvesting in 2021?

4 min read

Screen Shot 2021-09-06 at 4.02.41 pm
Screen Shot 2021-09-06 at 4.02.41 pm

As our world slowly moves closer to a post-pandemic new norm, we now find ourselves in a very enviable economic position in Australia. Record low interest rates, coupled with strong government support for the housing sector, which provides a brilliant opportunity to enter the market.

When we decide how to make our first move into property, we do well to consider all options available in purchasing our property, working to ensure we put our best foot forward in making this large financial step.  As we evaluate these options, we may consider ‘Rentvesting’.

The adage goes, “rent money is dead money” (unless you’re the one earning it!) which provides enough motivation for many Australians to want to own their own home. In a way, Rentvesting tips this on its head.

What exactly is Rentvesting in 2021?

Rentvesting is when an individual owns an investment property (or multiple properties), whilst still renting the property they choose to live in. According to the ABS records 340,000+ Australians have opted to follow this path.

When looking to buy, many of us have to answer the question: Would you rather be in an area close to work, with an appealing lifestyle element, or purchase a home in an area that you can afford?

Why not both?

Rentvesting means property owners can have the best of both worlds. They continue to rent where they want to live (maybe that hip, inner city suburb where property prices are way out of reach for now) then buying elsewhere and renting that property. Charging rent can cover some or all of the ownership costs, while continuing to rent the home where you live. If the investment property is earning a profit, that income can even be used to fund home rental costs.

You might end up spending around the same if you were just renting or if you were living in a home you owned. The difference is, you can live where you want and get your foot in the growing property market. This strategy allows you to enjoy the lifestyle you want now, while at the same time building a property portfolio for the future.

Ready to take the next step?

Reach out to our team and it would be our pleasure to help you find what is going to be best for you.

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