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.
“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.