It’s the latest buzzword in the property industry: Rentvesting. Renting where you want to live, buying where you can afford to. And it’s proving a popular option, particularly amongst younger first home buyers who are keen to invest in their future without foregoing their lifestyle. So, what are the benefits of rentvesting and is it for everyone? Read on to find out.
A viable strategy
Traditional home ownership is changing. Where owning a home was once the norm, rocketing property prices have led to a change in the market, with buyers employing inventive strategies to get onto the property ladder.
Enter rentvesting: Renting your ideal property in your dream location – be it for career or lifestyle choice – while growing your property portfolio elsewhere.
Young people who are working hard to progress their careers but are unable to afford the inflated entry-level property prices in a big city, don’t need to forgo their home ownership dreams. Rentvesting could provide a viable solution for getting a foot onto the property ladder.
For many young home buyers, rentvesting offers the best of both worlds. Living where you want to with the flexibility you need to progress your career, combined with the opportunity to buy a property now before prices rise even further.
Rentvesting offers you a number of investment tax benefits, so it’s worthwhile discussing these with your accountant or financial adviser before making a decision.
And yes, you’ll still be paying someone else’s mortgage while renting, but your tenants will be doing the same for you: slowly chipping away at your mortgage debt while you continue to live where you want to.
In time, you may be able to tap into your investment property’s growing equity to fund the purchase of another investment property, or even your dream home.
Is rentvesting right for me?
Knowing whether or not rentvesting is the right choice for you will depend on your specific circumstances. If a lifestyle location is important or necessary to your career advancement, and if your long-term goals include building wealth through property, then rentvesting may be the right option for you.
Get in touch with a Mortgage Express adviser to talk through your financial options and to find out more about rentvesting.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Mortgage Express Limited for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication.
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