Rentvesting: The Smart Strategy to Get Ahead in Property

If you're struggling to buy a home in the location you want to live in, there's a strategy that could get you into the property market sooner—rentvesting. Rentvesting allows you to rent where you want to live while purchasing an investment property in a more affordable area. It’s a great way to start building wealth without compromising your lifestyle. Here’s why it could be a smart move for you.

1. Get Into the Market Sooner

We all know property prices in prime locations can be sky-high, making it difficult to save a deposit. But with rentvesting, you don’t have to wait years to afford a home in your dream location. Instead, you can purchase a more affordable property in a different area, start building equity, and get on the property ladder sooner rather than later.

2. More Options for Where to Buy

When you're not tied to living in the property you buy, your options open up significantly. You can purchase in an area with strong growth potential, better rental yields, or simply a lower entry price. This flexibility allows you to make a strategic investment based on market conditions rather than being restricted by where you need to live.

3. Additional Income Increases Borrowing Capacity

Since your investment property generates rental income, lenders may take this into account when assessing your borrowing capacity. This can mean a higher loan amount than if you were buying a home purely for yourself to live in, making it easier to finance your first property purchase.

4. Leverage Equity for Your Next Property

Over time, as your property increases in value and you pay down your loan, you build equity. This equity can be used as a deposit for your next property purchase—whether that’s another investment or finally buying your dream home. Rentvesting sets you up with a stepping stone to grow your property portfolio.

5. Potential Tax Benefits

There may be tax benefits to owning an investment property, such as deductions for interest payments, property expenses, and depreciation. However, tax laws can be complex, so it's essential to speak with a qualified accountant to understand what benefits may apply to you.

Is Rentvesting Right for You?

Rentvesting isn’t for everyone, but if you’re keen to start building wealth and enter the property market sooner, it’s a strategy worth considering. As always, working with the right professionals—including a mortgage broker (that’s where I come in!) and an accountant—can help you make informed decisions to maximize the benefits.

Thinking about rentvesting? Let’s chat about your options and find a strategy that works for you!