RENTVESTING...
What is the concept of rentvesting?
Rentvesting is a home-owning strategy where you rent a property to live in that's right for your lifestyle, while you own an investment property that's right for your budget. As home prices in inner-city areas have gone up, this strategy is increasingly popular, especially among younger buyers.
Why Rentvest?
Rentvesting is an increasingly popular home-owning strategy where buyers rent a property in an area they want to live while buying an investment property somewhere more affordable.
Often, rentvesters will buy an investment property or multiple properties in rural or regional areas where house prices are typically lower than in cities. They will then rent a property in the CBD or inner-city suburbs where they can enjoy the benefits of a city lifestyle.
One of the top reasons why rentvesting is popular is because you can use the income from the property that you purchase as an investment to pay for your rent and support the lifestyle you want.
In a time when inner-city housing prices continue to rise, rentvesting is a way for people to enter the property market without sacrificing their lifestyle.
Why is rentvesting is a great option to consider?
Rather than waiting years to buy with a larger deposit, rentvesting gives first-time property buyers the opportunity to buy sooner.
Rentvesting means that you can live where you want to live as opposed to having to live only where you can afford to.
If you’re someone who enjoys the inner-city lifestyle but cannot afford to buy a home there, rentvesting makes it possible to rent where you can enjoy those city aspects while letting the income generated by your investment property help cover the costs of your rent and lifestyle.
Rentvesting is also great for people who are constantly moving around due to their work or lifestyle. They may want to choose to purchase a property somewhere but live in a short-term rental somewhere else.
Another clear pro of rentvesting is that you have an investment in bricks-and-mortar that is highly likely to appreciate over the years.
There are a host of tax benefits on your investment property/properties. Even interest payments on your investment property loan can be claimed as a tax deduction. You can claim depreciation on the building and any new fixtures and fittings.
You can use the income generated from leasing out your investment property to pay down the mortgage on the property or to cover your rental costs in your primary property.
Barbara Hutson