What is rentvesting?

How can you live the inner-city executive life on a mid-career budget? You can’t – at least, that’s what more than a decade of skyrocketing capital city house prices would suggest. But rentvesting offers an alternative solution. 

Rentvesting is a property investment strategy that enables investors, most commonly first-home buyers, to get a foot on the property ladder without compromising their lifestyle. And the trend is booming. Research by Mortgage Choice shows that in 2017 more than one quarter of investors bought an investment property before an owner-occupied dwelling, making ‘rentvestors’ a new breed of lifestyle-conscious, market-savvy investors who choose to buy where they can afford and rent where they want to live.

Peter Mastroianni, founder of rentvesting.com.au, says rentvesting gets first-home buyers into the property market faster, enabling them to build equity and draw a rental income to offset the mortgage repayments, whilst also accessing tax benefits. “The primary benefit is that it allows you to maintain your desired lifestyle, whilst building the largest asset base you can with the money that you can afford,” Peter says.

But not all rentvestors are looking for a first-home buyer investment. Some successful property investors2 use rentvesting as a way of adding to their portfolio without taking on too much debt, while at the same time having the flexibility to live where they choose. Not only is the rent they pay more affordable than the mortgage repayments on the same dwelling, but they can also take advantage of lucrative tax benefits on the property they own.