The rentvesting process can be broken down into five steps. Do your research on the national property market and find areas that are predicted to grow. Research rental yields in these growth areas to discover where you will get the best rental income. Find the price point for the area you are looking to invest in, save for a deposit and apply for a loan. Make all the necessary arrangements to purchase your investment property. We recommend using property management services to keep your investment in its best shape and running smoothly. Get the property tenanted and leave it until you’re ready to move in or sell. These steps are simply a guideline to help you get started with your property portfolio investments. Rentvesting is fast becoming a popular option with good reason, but doing current market research is essential!

Rentvesting

Q: What are the benefits of rentvesting?

The Pros Rental income: You can utilise the rental income from your investment property to pay off a mortgage or to cover your home rental costs. Check out our guide on unlocking value from rental property renovations and making the most of your property investment. Rentvesting tax benefit: You may be able to claim some rentvesting tax benefit on investment property expenses as tax deductions. These include the interest charged for loans, rental costs (like insurance and advertising), and depreciation costs. Choose your perfect home: As a rentvestor, you’re not limited to living where you can afford to buy, and rentals can open up a lot more possibilities for your lifestyle. The Cons Ongoing homeownership costs: As a property owner, you would usually be in charge of the costs and management of repairs to your property. You may also have to pay leasing agents fees. Potential capital loss: If your investment property decreases in value, you might have to sell it at a loss. Your primary residence can lack stability: Rent may increase or you may have to move if the owner wants to vacate the property or change tenants.

Published 29 March 2022Updated 25th January 2023

Dictionary

Rentvesting

What is Rentvesting?

Rentvesting is an increasingly popular property investment strategy in Australia and is a break in the norm of conventional thinking about home ownership.

As the name suggests, to rentvest is to continue to live in a rental home, while buying or owning an investment property. This strategy can allow rentvesters to earn an additional income while also giving them the flexibility to live in a location that is better suited to their lifestyles.

For example, it is expensive to buy property in Sydney which means rentals in this area are available for long-term tenancy. Anyone keen on living in Sydney but not able to invest in a Sydney property, could opt for rentvesting as a solution. Investing in a property in a more affordable city and attracting the right tenant for it could give you the funding you need to make the move to a rental in Sydney.

FAQs about Rentvesting

Is rentvesting worth it?

At first glance, rentvesting may seem illogical and a lot of work. Why would anyone choose to pay additional rent when they already have a property and mortgage to pay off?

The simple answer is that rentvesting has a lot to offer the right person. One of the most common reasons people choose to rentvest is the appeal of renting a property to live in that’s suitable to your lifestyle while owning an investment property that earns an income.

The rentvesters playbook generally starts with buying an investment property within a financially suitable budget, then renting out the property to tenants while recovering enough to settle the cost of a rented home, as well as some or all of the ownership costs over time.

If renvesting has piqued your interest, we always recommend speaking to professionals or someone with experience in property management to fully understand how to get the best from your rentvestment. If you already have an investment and are looking to rent, here’s some of our top tips when renting out your property for the first time.

Best Practice Tips:

Simply put, there’s no one-size-fits-all when it comes to rentvesting and answering the question “is rentvesting worth it?” would depend on factors like your budget, lifestyle and expectations.

What are the benefits of rentvesting?

The Pros

Rental income: You can utilise the rental income from your investment property to pay off a mortgage or to cover your home rental costs. Check out our guide on unlocking value from rental property renovations and making the most of your property investment.
Rentvesting tax benefit: You may be able to claim some rentvesting tax benefit on investment property expenses as tax deductions. These include the interest charged for loans, rental costs (like insurance and advertising), and depreciation costs.
Choose your perfect home: As a rentvestor, you’re not limited to living where you can afford to buy, and rentals can open up a lot more possibilities for your lifestyle.

The Cons

Ongoing homeownership costs: As a property owner, you would usually be in charge of the costs and management of repairs to your property. You may also have to pay leasing agents fees.
Potential capital loss: If your investment property decreases in value, you might have to sell it at a loss.
Your primary residence can lack stability: Rent may increase or you may have to move if the owner wants to vacate the property or change tenants.

How do I rentvest?

The rentvesting process can be broken down into five steps.

Do your research on the national property market and find areas that are predicted to grow.
Research rental yields in these growth areas to discover where you will get the best rental income.
Find the price point for the area you are looking to invest in, save for a deposit and apply for a loan.
Make all the necessary arrangements to purchase your investment property. We recommend using property management services to keep your investment in its best shape and running smoothly.
Get the property tenanted and leave it until you’re ready to move in or sell.

These steps are simply a guideline to help you get started with your property portfolio investments. Rentvesting is fast becoming a popular option with good reason, but doing current market research is essential!

Disclaimer: The information provided on this blog is for general informational purposes only. All information is provided in good faith; however, we do not account for specific situations, facts or circumstances. As such, we make no representation or warranty of any kind whatsoever, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information presented.

This blog may also contain links to other sites or content belonging to or originating from third parties. We do not investigate or monitor such external links for accuracy, adequacy, validity, reliability, availability or completeness, and therefore, we shall not be liable and/or held responsible for any information contained therein.

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Rentvesting

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