‘Rentvesting’ is a growing trend helping young Aussies own their own home.

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There’s a growing trend that’s helping Aussies crack into the property market, without sacrificing their lifestyle. And no, it’s not cutting out smashed avo from their diets.

The term is “rentvesting”  and put simply, it means you own a home – but live somewhere else.

Rentvesters have both a mortgage and lease, which might sound like more hassle than hustle, but the practice is actually a solution to a very common problem.

As money expert at Finder.com.au Bessie Hassan explains, it gives buyers “a taste of the best of both worlds”.

Listen: Are you living a lavish life of daily brunches? No wonder you can’t buy a house. (Post continues.)

“Rentvesting is a trend that’s really taken off in recent years and it’s probably one that we’re going to be hearing a lot more about in the coming years with the property market getting more and more competitive,” she says.

“Young Aussies are looking to other options to break into the property market and rentvesting makes this possible.

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“Essentially rentvesting is where you buy a property in a more affordable suburb and then rent in your desired suburb, which might be close to transport or close to work. That allows you to maintain the lifestyle that you want.”

Hassan says the rent may not cover the cost of renting another property, but this can still make sense as often the the focus is on the investment opportunity of owning a home.

For example, at the end of five years you might sell your home for more than you bought it and use that money to buy a home in the suburb you actually want to live – or your lifestyle might change so living in that outer suburb may be more appealing.

Janine Bessant has been rentvesting since June this year, after realising that living in her beachside home no longer made sense.

Janine and her husband Nathan moved closer to the city, but kept their home by the sea. (Image supplied,)

She and her husband Nathan had bought an apartment in Warriewood, by the beach in Sydney's northern suburbs in early 2014. They purchased the home because it suited their budget and was where they wanted to live.

But by mid-2017 Janine's three-hour round trip commute to her Surry Hills office had become exhausting and so she and her partner moved to an apartment in Kurraba Point and started renting out their home.

"We wanted to be closer to my work because the commute was just too tiring. It was just unattainable for a long period of time," she says.

"We were umming and ahhing on whether to rent or purchase another property, but we just decided to rent and then decide if we wanted to purchase another one down the track."

Janine says her now 30-minute commute is much more manageable and the couple are not really out-of-pocket because the cost of renting out their existing apartment just about covers the cost of renting their current one, while they continue to pay their mortgage - just like they did before the move.

"I have a girlfriend who is doing something similar. She has a place out in Kellyville and is renting in Birchgrove to be closer to work."

It's not just a trend for Sydney-siders or people who are making the move for lifestyle reasons.

For one couple, who own a home in the north Melbourne suburb of Northcote and have continued to rent in south-eastern suburb, Hawthorn, it was the more financially savvy option.

"Basically it would be much tighter on the budget to live in the house we bought as we get money for the rent from our tenants which goes straight to the mortgage," they explained.

"Where we live is smaller and less rent therefore financially it just makes sense for us. This way we can save more money to again go straight into the mortgage."

So whether it's to maintain your current lifestyle, move closer to work or afford to buy bigger - rentvesting might just be the solution for young Australian's once disillusioned by the great Aussie dream, Hassan says.

"I think it's a good trend because it shows you can have the best of both worlds."

Are you a rentvester? How did you figure out if it was best for you?

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