Renting is forecast to become the accommodation of choice for many Australians this year thanks to housing affordability and the new trend of rentvesting is providing opportunities to those who want to stay within city limits but still enter the property market by way of property investing or developing.
Rentvesting to get on the property ladder
Rentvesting can be the perfect solution to getting your foot through the property door – rent a place in or near the city, keep your lifestyle and stay close to work, but purchase a property in the suburbs and have it tenanted or go the next level up and build a rear strata, for instance.
It used to be that Australians would buy a home and then do everything to pay it off as fast as possible, but now, rentvesting offers a different strategy to get on the property ladder.
Keep your lifestyle, start a property portfolio
As property prices gain their momentum back, purchasing in a centrally-located suburb can be out of reach. Instead, many are opting to rent rather than buy because it means not having to compromise their inner city or beachside lifestyle.
Rentvesting can be a great way for young people to enter the market, and get the best of both worlds.
Rentvesting allows your rental income to cover the mortgage expenses, so you can maintain your current lifestyle, and invest in property. However, you will need to be careful to ensure the property you purchase works within this strategy.
Blocks are bigger out in the suburbs
With blocks generally larger out in the suburbs comes more opportunity to grow your investment portfolio. You can either purchase a property or leave it as is to rent out, or you can consider buying a block where the r codes allow for subdivision and develop the property with multiple houses.
Zoning changes back in 2010 mean larger blocks can now be developed with multiple dwellings, so it’s important to have an understanding of the r codes to determine what you can build on your block.