Rentvesting – enter the property market without sacrificing your current lifestyle
Published by MFAA
As property prices continue to rise, purchasing in a centrally-located or sought-after area may be out of reach for you right now. Instead, many are opting to rent rather than buy as it means not having to compromise their preferred lifestyle, but for those still eager to enter the market, there is a way to get the best of both worlds.
‘Rentvesting’ is the term coined for when you purchase a property for investment purposes in an area you can afford and continue to live and rent in the area of your choice. An example of how the market is evolving, rentvesting is a wealth creation strategy that is popular among the younger generation due to the flexibility it offers in comparison to being an owner-occupier.
Rentvesting can allow your rental income to cover the mortgage expenses, so you can keep living the lifestyle you want.
For this strategy to work, you’ve got to be a good saver and live within your means. It’s a good idea to step away from the mentality of negative gearing and tax minimisation and buy neutrally, or ideally, a positively geared property as this provides higher rental yields.
While rentvesting may appear ideal to many, it’s not suited to everybody. To ensure you have the means to make ‘rentvesting’ work for you, contact an MFAA Accredited finance broker for advice on rentvesting and other property ownership strategies.