Rentvesting is a growing trend in the world of property investment, with the 2019 Property Investment Sentiment Survey indicating that over 16% of participating investors have adopted this strategy. It simply means buying one or more properties as an investment while renting a place to live in. It’s a strategy where an investor chooses to live in a location they prefer while investing in properties in areas they can afford.
Why do People Rent while Investing?
Rentvesting is a strategy that’s becoming more and more popular as home prices in desirable inner-city areas continue to rise. According to the 2023 Property Investment Sentiment Survey, over one-third of first-time investors are choosing to rentvest.
This strategy may seem counterintuitive, as it involves paying rent for a place to live while also paying for an investment property. However, rentvesting allows investors to take advantage of the benefits of both owning and renting. By purchasing an investment property that falls within their budget, they can start earning rental income, build equity, and achieve future growth. Additionally, renting out an investment property can offset many of its associated costs and provide opportunities for tax savings.
Another advantage of rentvesting is that it allows investors to live in the location of their choice, whether that be close to work, important amenities or lifestyle benefits. Despite not being able to afford a home in the area they desire to live, they can still achieve their property goals sooner. Rentvesting provides the freedom to live where you want while also securing a valuable financial asset that will appreciate in value over time.
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