Property Investment Strategy: Rentvesting
What is Rentvesting?
Rentvesting is a property investment strategy where you rent where you want to live and buy an investment property in a more affordable or high-growth area. This allows you to enjoy the lifestyle of a desirable location while still building wealth through property ownership.
How It Works
Rent in a Preferred Location
You might love living in an inner-city suburb, near the beach, or close to work or family, but buying there could be unaffordable. With rentvesting, you choose lifestyle over ownership, paying rent to live where you want without taking on a huge mortgage in that area.
Example: Renting in Bondi while buying an investment property in Brisbane.
Invest in a More Affordable or High-Growth Market
Instead of buying in an expensive suburb with low rental returns and flat capital growth, you purchase in areas with better investment fundamentals, like strong rental yield, growing population, or planned infrastructure upgrades.
You're not just buying where you live, you're buying where your money works hardest.
Use Rental Income to Help Cover Mortgage Costs’
The rent your tenants pay helps cover (or significantly offset) the mortgage repayments on your investment property. Combined with potential tax benefits, this makes the investment more manageable, even while you're paying rent elsewhere.
Over time, this creates a self-sustaining investment while you live your desired lifestyle.
The Key Benefits of Rentvesting
Early Entry to the Market
One of the biggest hurdles for first-home buyers is saving for a deposit in expensive suburbs. Rentvesting allows you to get on the ladder sooner by buying in a cheaper market, instead of waiting years to save more.
The sooner you get in, the sooner you start building equity and taking advantage of capital growth.
Lifestyle Flexibility
You’re not locked into living in a property just because you own it. This is perfect for professionals who may want to move around, live close to work, or enjoy vibrant urban lifestyles. You can still move as life changes, without needing to sell.
Live where you want. Invest where it makes sense.
Investment Benefits & Tax Deductions
Investment properties come with tax perks like depreciation, deductible loan interest, and expense write-offs. These can significantly boost your cash flow and reduce your overall tax burden.
A principal place of residence doesn't offer the same tax efficiency as an investment property.
Let Your Investment Work for You
With a well-selected investment property, your tenant helps pay off your mortgage while your asset grows in value. Over time, you can leverage that equity to buy more properties, accelerating your wealth journey.
This is the power of letting your money, and your tenants, work for you.
