The new route to property investing
If you’ve heard of the term ‘rentvestor’, you are already ahead of the curve. Rentvesting is a growing trend in property investment and a term to describe first time home buyers who are doing investment a little differently.
Rentvesting in a nutshell
Rentvesting in where you invest in your first home in and up and coming suburb, with the intention to let it to tenants. You remain in your own rental accommodation in your chosen suburb – which is often more established and therefore more expensive.
In time, assuming property prices increase, the additional equity from your investment property will help fund a purchase of your own in your chosen suburb.
Why become a rentvestor?
Many people dream of getting on the property ladder – investing in property is a great way to secure your future finances and set yourself up for the future. However, buying your first home often means compromise. It could be that you have to move further out of town to an area you can afford, you may be moving further from work or the amenities you enjoy, or perhaps you’ll need to downsize and get rid of a few possessions.
Understandably, not everyone wants to compromise their lifestyle to get on the property ladder. Luckily, it doesn’t have to be this way. A rentvestor is able to get on the property ladder and benefit from a growing housing market, while still renting and enjoying the lifestyle they’re used to.
The typical rentvestor
Usually a rentvestor will not have another home, but this isn’t a necessity. There could be lots of reasons to live in a rental home while purchasing a property to let to tenants. Many rentvestors find that after purchasing one property, they will continue to build their portfolio – all while still living in their rental accommodation.
How does it work?
1. Rentvestors use their deposit savings to purchase their first property in an affordable, high growth suburb specifically to rent it to tenants.
2. By using their first purchase to become a landlord, rentvestors remain in their current rental accommodation in their chosen suburb.
3. Then, rentvestors can use the profits and equity gain from their investment property to fund a purchase in their preferred location after a few years.
4. Rentvestors are also able to take advantage of various tax benefits for landlords.
Waiting to save up more deposit funds or to get a pay rise at work can take decades. If the property is in the right suburb, as our in-depth property market analysis often shows, it can be as little as two or three years before a rentvestor sees enough return on their investment to boost their savings and purchase a property in their dream location.
To discover if rentvesting is for you, or to learn about up and coming growth suburbs where you can benefit from the highest market growth, speak to a Reventon expert today.