3 REASONS WHY RENTVESTING MIGHT BE THE RIGHT MOVE FOR YOU
Getting on the property ladder is a key milestone in many people’s lives, but not everyone chooses to settle down in their new home once it’s purchased.
In fact, a growing number of hard-working Australians are ‘Rentvesting’, which is where you buy real estate in one location you can afford but continue renting in the location you desire.
But what makes rentvesting such a popular strategy? And do you fit the typical profile of a rent-vestor? Let’s take a closer look at some of the reasons why you might choose this strategy.
1. House prices are too high in your dream location
The Federal Government cranked up its money printing presses during COVID and ever since we have seen high inflation numbers. House prices boomed shortly after this time and have pushed the dream of home-ownership further out of reach for many hard-working Australians. Fortunately, there is a way first-timers can break into the property market and jump on the property ladder, and that is through Rentvesting.
Rentvestors typically purchase an investment property in affordable suburbs where prices are lower but choose to rent in more expensive inner-city areas that better suit their lifestyle. Rentvesting can therefore give you the best of both worlds; you can invest in a tangible asset for your future while still enjoying the cosmopolitan dream in some of Australia’s most vibrant cities.
2. You’re young and live in NSW
You might think that buying an investment property is more common among older generations, such as baby boomers, but recent research has shown young people are the driving force in the market. According to ING Direct research figures, it found that 22 percent of Generation Y, claimed to own an investment property. Meanwhile, 19 percent of baby boomers and 20 percent of Generation X said the same.
Furthermore, NSW residents are among the most likely people in Australia to purchase investment properties. Twenty-two percent of individuals in the state own one, with Western Australia being the only state to match this figure.
What’s interesting is that while there are continued questions around affordability and the challenges for younger generations in getting onto the property ladder, it’s actually Gen Y that is leading the property investment pack. This was revealed in the ING Direct findings too.
3. You’re required to move around a lot
Whether it’s for your job, family commitments, or a penchant for travelling, you may not want to stay tied to one location for the foreseeable future. Renting provides you with the flexibility to move cities, states, or even countries more quickly and easily than if you’re living in a purchased property. So, if you’re not ready to put down permanent roots, rentvesting can give you the freedom to upgrade or downgrade according to your circumstances. Furthermore, an investment property often provides an income stream from the rent that you can use to build wealth or fund other ventures. You may also be able to enjoy great tax benefits by leasing out your property.
However, it’s important to talk to an experienced investment property specialist to find out what is the best option for your specific requirements and numbers.
Would you like to learn more about building a viable strategy that suits your numbers and lifestyle goals? The Property Investment Store can guide you every step of the way. Please click on the button below to book a free, consultation with one of our friendly Property Strategists.