30 Apr 2018

Top 5 Reasons to Consider Rentvesting


With property prices at an all-time high, it’s not surprising that more and more first home buyers are looking at other options to be able to get a foothold in the property market sooner.

But the younger generation of home buyers may have an advantage in the form of ‘rentvesting’. Rentvesting simply allows you to rent in your preferred location, within an easy commute to work or the beach, while buying an investment property in far-flung outer suburbs to generate rental income and build equity for when they need it.

This may prove to be a sensible compromise for many and here are the top 5 reasons why becoming a rentvestor could be the way to go:

You get to live in your dream location.

The convenience of proximity to work and inner-city lifestyle are major draw cards for singles and couples. You’re more likely to find it cheaper to rent closer to the city than it is to buy the same place, and rentvesting offers the best of both worlds.

You can move whenever you want to.

The sense of freedom and not being tied down to one place for the long-term is another attractive plus. You can quickly change rental accommodation if your location of work changes or if you need a bigger place, and do so easily, at short notice.

You can claim tax benefits on your investment.

Various expenses related to your investment property, from the interest on your mortgage repayments to property maintenance costs, could be tax deductible. Property investing may help Improve your cash flow and reduce your tax liability in one go, something you wouldn’t get from owning and living in your own home.

You can use your investment equity to borrow more.

As your investment property continues to grow in value, it gives you more leverage than just your income. It could increase your borrowing power when it’s time to go for a larger owner-occupied home loan. Or you could use the equity to grow your investment portfolio while continuing to rent where you want to.

Your tenants will help you pay down your investment.

While you’re living in your dream location, your tenants will, in turn, be the ones paying off and reducing your investment debt. That could make servicing your investment affordable while boosting your net value every month.

High property prices don’t have to lock you out of the property market. It’s time to make the most of the low-interest rates and take that next step, and rentvesting may be the way to get started.

Mortgage House

At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.

But don’t worry, we can help with that.

If you’re thinking of buying a home or would like to explore rentvesting, you can contact us for information about the best options for you when it comes to your mortgage.

Click here to speak to us!

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