We all know how Australian property values have gone gangbusters over the past two years. While that’s great if you are in the market, it’s not so great if you are looking to buy.
You need a smart strategy!
Rentvesting Made Easy
Increasingly, savvy first-time property buyers are adopting a ‘rentvesting’ strategy to get into the property market. Using this strategy investors rent in a suburb they enjoy living in while they buy an investment property in a more affordable location that:
- Eases you into the property market
- Builds your net worth and asset base
- Provides you with an asset you can use as security for a future home loan for your own home while
- Enjoying tax-deductible benefits.
Why Do People Rentvest?
With the skyrocketing prices of real estate in Australia, first home buyers are finding the ‘deposit’ required for that dream home keeps increasing and becoming further out of their reach.
Even if your bank agrees to a home loan, the burden of your mortgage repayments can create real financial hardship, especially in the first few years. These financial constraints can dramatically cramp your lifestyle options.
Rentvesting Gives You Greater Control Over Your Cash and Your Investment Strategy With rentvesting you enjoy greater control over what property you buy. You decide:
- How much of your pre-approval loan do you need to drawdown
- When to buy your second and subsequent properties
- What location do you buy into for your next property
- What cash flow do you require from your investment property to avoid your finances becoming over-stressed
Rentvesting also offers the potential for your investment property to deliver a handy capital gain over the medium to long term.
Helping You Build Your Financial Future
As a property investor, there’s a range of financial benefits you may enjoy that aren’t available to owner-occupiers. Moreover, your rent may be lower than your potential mortgage repayments if you bought a private home.
Today, more women are adopting Rentvesting as their strategy to secure their financial future while spreading their financial risk over a portfolio. Providing you are financially disciplined, you can use the equity to fund the deposit for your own home or keep building your investment portfolio.
Do Your Due Diligence
You still need to do your research when you adopt Rentvesting as your investment strategy. Crunch the numbers, visit your target suburbs and do your due diligence on what makes your target suburb tick investment-wise.
Take advantage of the calculators out there to weigh the costs and potential benefits when choosing between rentvesting or buying your principal place of residence.
Rentvesting can be an attractive strategy. You don’t have to surrender your goal of owning your own home. A rentvesting strategy simply allows you to break into the property market sooner, rather than later.