Is now the time to build your property portfolio?
’ Rentvesting’ – the latest real estate buzzword – is the strategy of buying a property in a more affordable area as an investment, while continuing to rent in the more expensive area you want to live in.
Billed as a solution to the affordability crisis, it’s a great option for those keen to get on to the property ladder, but who cannot afford to buy a home in the area they want to live in.
‘Rentvesting’ has become the newest way to secure a slice of the ‘great Australian dream’.
The ‘rentvesting’ strategy
By buying a property to rent out in a cheaper area, homeowners can enjoy the best of both worlds – the lifestyle they want in the location they choose, while also beginning to build their wealth for the future.
Regional areas have been popular with ‘rentvestors’, because they offer great value for money due to the comparatively lower purchase prices of property, relative to rents. Data shows that landlords who own properties in regional areas can also expect a greater return on their investment than those with properties in the capital cities.
Where to ‘rentvest’?
When considering where to purchase a ‘rentvesting’ property, be sure to check rental vacancy rates for the suburb, to minimise the likelihood of the property being unoccupied (and not earning any rent) for too long.
You should also become familiar with the target market, to ensure the property will be attractive to prospective tenants – for example, near public transport to lure students, or with a safe and spacious garden if families are the key demographic.
If you play your cards right, you could have one foot on the property ladder and the other in your prime real estate rented abode and be on your way to building your own real estate empire.