Whilst many of us are eager to enter the property market and own a home one day, high property prices can make our dream seem impossible. Especially if you can’t afford to buy in your desired area.
Enter rentvesting - a strategy gaining traction with homebuyers. What is rentvesting?
Rentvesting refers to buyers purchasing an investment property within their price range in a more affordable suburb while continuing to rent in their desired location.
It means tenants who are happy with the lifestyle of the suburb where they are currently renting, can still enter the market by purchasing property with potential for longer term capital growth.
Rather than waiting for years to afford the dream home, rentvesting allows investors the ability to break into the market faster and own a property, often with a smaller deposit, because an investment in outer suburbs is likely to be more affordable. The property can still deliver a solid rental yield and of course, the investor can take advantage of all the tax and income benefits of the investment while building equity
These more affordable properties may take less time to become cash flow positive or cash flow neutral, which means out-of-pocket expenses may not have as significant an impact on the investor’s finances.
It’s also a good strategy when tenants aren’t quite sure where they want to live in the longer term.
Another benefit is that rentvesting provides good flexibility to choose an investment budget that doesn’t stretch investors too much, especially those who are new to the property market.
If planned and executed correctly, rentvesting can be a great option to consider entering the market.
The dream of owning your own home is still alive
Choosing a home loan can be daunting given the number of products and lenders available.
Why not talk to a Coronis Mortgage Broker today? Our experts will walk you through all the options and negotiate a home loan rate for you, with a lender you best meets your needs. They will answer all your questions objectively. And best of all, using a Coronis mortgage broker is complimentary.