Over the last 4 years it has become SO obvious the importance of loving where you live.
Despite lockdowns being a thing of the past, working from home is at an all time high – meaning many of us are spending WAY more time in our own places than we once had.
This has likely gone one of two ways – the first being a feeling of frustration and unhappiness, due to the location and environment of your home. On the other hand, you may feel as though you are super lucky to live in a great location, in a nice property that has everything that you could possibly want.
That being said, with Australian property prices continuing to increase, due to growing population and a huge shortage in supply, it is becoming harder and harder to purchase property in our dream location.
This is where the idea of rentvesting comes in. As the name suggests, it’s a combination of the notions of renting and investing.
At the crux of it, if you’re rentvesting, you rent somewhere – the location you LOVE living whilst investing in a property in a location that you can AFFORD. It allows a unique freedom compared to the long-standing owner-occupier property ownership ideology.
Traditionally, having our own property has been all about being able to say that we can stake claim to our very own piece of land. At the end of the day, that is a pretty great thing, as it really makes us feel like we’ve worked for our achievements – and for lots of us, there’s nothing like owning our own home.
That’s all well and good, but as we’ve already highlighted, it’s not for everyone. If you’ve bought somewhere that you can afford to live, but it’s not in your ideal area, and it’s an hour to work, is that really something you can sustain and be super proud of? Maybe it is, and that’s great. But, as lots of us have learnt – we don’t want to be pigeonholed into living in a location that we don’t love. So, it’s about satisfying not only our financial situation and goals, but also what we really want out of life.
So, now we’ve established the concept of rentvesting, let’s discuss 3 things you MUST consider before heading down this path!
- Location is STILL key.
One of our go-to sayings – as clichéd as it is – Location, Location, Location, always rings true. At the end of the day, just because you can afford a certain suburb, or city, doesn’t necessarily mean you should. There’s a lot more to purchasing a property than just checking whether it fits in your budget. Locations in high demand, with a low supply of new houses, paired with strong macroeconomic factors, such as unemployment rates and migration patterns is key to making rentvesting work for you.
- Strategy
Is rentvesting something that might work well for your circumstances?
In any case, effective property investment relies upon building a strategy around your unique goals and circumstances, including income, and familial situation, as well as your short and long-term objectives. In the frame of rentvesting, building your strategy starts with understanding your capabilities and desires from a rental perspective. Taking this into account, alongside your budget, will give you a great perspective of how your investment’s rental yield will help pay your mortgage, and potentially your own rent too
- What are your long-term goals?
This links in nicely with your strategy. Long-term goals – realistic and timely – will give you clarity into whether rentvesting is right for you. At its core, rentvesting provides a great means to get your foot in the door of a property that works from an investment perspective, whilst also allowing you to live EXACTLY where you want to live.
In terms of long-term objectives, it can be a place where you can start to build up your portfolio, from an obtainable beginning. As a first home buyer, the property market can feel incredibly hard to jump into – starting off on the rentvesting journey in 2024 can really ease the burden and financial stress.
Want to chat more about how rentvestment can be built into your long-term property investment strategy?
We’re here to help guide you along your journey, with tailored planning, and step by step guidance.
Give us a call on 1300 776 735, or get in contact here – we’d love to help!
