Sana’s advantages of rentvesting in 2022

With house prices seeing record gains in 2021, getting into a home can be difficult – especially if you live in a city like Sydney, Melbourne, or Canberra where the median house price is above $1 million.

 

However, if you want to find a way into the property market, for many people rentvesting can be a good option.

 

Rentvesting means that you rent where you want to live and invest where you can afford. There are a number of advantages to going down this path and you could even end up better off in the long run.

 

Buy now

 

With house prices continually rising, if you’re stuck trying to save up a deposit you can find yourself in a position where price increases outpace your ability to save.

 

If you don’t want to lose pace with the broader market, buying an investment property where you can afford to (based on your current deposit size) might be an option.

 

That way you’ll be in the market and getting the benefit from any capital growth.

 

Live where you want

 

If you’re a first home buyer, you’re normally not able to buy your dream home with your first property purchase.

 

Instead, many first home buyers move to areas that they can afford, which might mean living somewhere they don’t want to.

 

By renting and investing elsewhere, you get the best of both worlds as it’s normally easier to rent in a specific location than to buy there.

 

Buy more properties

 

For many home buyers, if you max out your borrowing capacity on your own home, you aren’t able to buy any other properties.

 

By investing in a different location that might have higher yields, it could allow you to build a portfolio of properties over time.

 

You’re also able to identify areas that have the potential to grow in value faster, rather than the location that you’re wanting to buy into.

 

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