Quick Guide to Rentvesting: Is It Right for You?
With house prices on the rise, getting into your dream home can seem unattainable. Luckily, there’s another option for those trying to get into the property market: rentvesting. We break down the advantages of this investment technique.
If you live in Melbourne, Sydney or Canberra, a city where the median house price is over $1 million, getting into your own home can be difficult. Luckily, there’s another option for those trying to get into the property market: rentvesting.
Not sure what rentvesting means? It means renting where you want to live and investing where you can afford. There are advantages of taking this approach and you might even end up better off in the long term.
You don’t have to wait as long to buy
If the continuous rise of house prices outpaces your ability to save up for a deposit, you may feel you’ll never be able to get into the property market. Buying an investment property in an area you can afford with your current deposit might be an option to ensure you don’t lose pace with the housing market. Taking this approach means you’ll be in the market and can take advantage of any capital growth in your investment property.
Live in the home and suburb you want
For first home buyers, your first property purchase is not likely to be your dream home. As a compromise, many first home buyers end up moving to more affordable areas that they may not necessarily have hoped to live in. Choosing to rent where you want to live and invest in a more affordable area means you’ll get the best of both worlds, as finding a rental property in a particular area tends to be more accessible than buying a property.
You can build up an investment portfolio
Maxing our your borrowing capacity on your own home means that most home buyers aren’t able to buy additional properties easily. If you’re looking to build an investment portfolio with multiple properties, investing in a location with higher yields may be a good option.
This article is intended to provide general information of an educational nature only. It doesn’t take into consideration your personal financial situation and should not be relied upon as financial advice.
