Invest
What to know before rentvesting
New research has found that over half of investors are considering rentvesting in 2020. Here’s what you need to know before embarking on this strategy.
What to know before rentvesting
New research has found that over half of investors are considering rentvesting in 2020. Here’s what you need to know before embarking on this strategy.
Described as a strategy whereby an investor buys in one location and rents in another, “rentvesting” is becoming increasing common in Australia’s property market.
In fact, according to the 2019 PIPA Investor Sentiment Survey, 63 per cent of investors are considering rentvesting in the New Year.
Many have touted its benefits, including Justin Picker, who spoke on nestegg's sister publication, The Smart Property Investment Show earlier this year.
“If you’re able to live at home, or you’ve got cheap rent and stuff like that, it’s certainly something I would recommend – and build a property portfolio as well so that you’ve got some assets building for you in the background,” Mr Picker told host Phil Tarrant at the time.
“I just think it gives flexibility, and once we’ve got a little bit more certainty and those type of things, I’ll probably look to use that equity as a deposit for a house later on down the track.”
Particularly for people who cannot afford to buy in the major capital cities, it is not uncommon for investors to rent where they want to live in these cities, in order to make money while working harder on their investments, according to Mr Picker.
“I suppose the idea of rentvesting to me is certainly a way to go.”
However, despite the trend being picked up more and more, PIPA chairman Mr Koulizos issued a warning to novice investors who tried to follow this strategy without expert advice.
He said investing interstate required a strong understanding of local markets and cycles as well as state-specific legislation that can impact rental returns.
“Going it alone when investing in any property, anywhere is always a risky move,” Mr Koulizos said.
“These risks skyrocket when someone tries to do that in a location that they don’t understand, plus they often buy sight unseen because of the distances involved and wind up with a dud investment in an inferior location.”
Mr Koulizos said serious investors always use Qualified Property Investment Advisers (QPIA), especially when buying in locations hundreds of kilometres from their own backdoors.
“QPIAs can recommend the best locations as well as dwelling types for investors because they have the skills, experience as well as superior research and networks across the country,” he said.
RELATED ARTICLES
Property
New investment platform Arkus allows Australians to invest in property for just $1
In a groundbreaking move to democratise investment in property-backed mortgage funds, GPS Investment Fund Limited has launched Arkus™, a retail investment platform designed to make investing ...Read more
Property
Help to Buy goes live: What 40,000 new buyers mean for banks, builders and the bottom line
Australia’s Help to Buy has opened, lowering the deposit hurdle to 2 per cent and aiming to support up to 40,000 households over four years. That single policy lever will reverberate through mortgage ...Read more
Property
Australia’s mortgage knife‑fight: investors, first‑home buyers and the new rules of lender competition
The mortgage market is staying hot even as rate relief remains elusive, with investors and first‑home buyers chasing scarce stock and lenders fighting for share on price, speed and digital experienceRead more
Property
Breaking Australia’s three‑property ceiling: the finance‑first playbook for scalable portfolios
Most Australian investors don’t stall at three properties because they run out of ambition — they run out of borrowing capacity. The ceiling is a finance constraint disguised as an asset problem. The ...Read more
Property
Gen Z's secret weapon: Why their homebuying spree could flip Australia's housing market
A surprising share of younger Australians are preparing to buy despite affordability headwinds. One in three Gen Z Australians intend to purchase within a few years and 32 per cent say escaping rent ...Read more
Property
Tasmania’s pet-positive pivot: What landlords, BTR operators and insurers need to do now
Tasmania will soon require landlords to allow pets unless they can prove a valid reason to refuse. This is more than a tenancy tweak; it is a structural signal that the balance of power in rental ...Read more
Property
NSW underquoting crackdown: the compliance reset creating both cost and competitive edge
NSW is moving to sharply increase penalties for misleading price guides, including fines linked to agent commissions and maximum penalties up to $110,000. Behind the headlines sits a more ...Read more
Property
ANZ’s mortgage growth, profit slump: why volume without margin won’t pay the dividends
ANZ lifted home-lending volumes, yet profits fell under the weight of regulatory and restructuring costs—an object lesson in the futility of growth that doesn’t convert to margin and productivityRead more
Property
New investment platform Arkus allows Australians to invest in property for just $1
In a groundbreaking move to democratise investment in property-backed mortgage funds, GPS Investment Fund Limited has launched Arkus™, a retail investment platform designed to make investing ...Read more
Property
Help to Buy goes live: What 40,000 new buyers mean for banks, builders and the bottom line
Australia’s Help to Buy has opened, lowering the deposit hurdle to 2 per cent and aiming to support up to 40,000 households over four years. That single policy lever will reverberate through mortgage ...Read more
Property
Australia’s mortgage knife‑fight: investors, first‑home buyers and the new rules of lender competition
The mortgage market is staying hot even as rate relief remains elusive, with investors and first‑home buyers chasing scarce stock and lenders fighting for share on price, speed and digital experienceRead more
Property
Breaking Australia’s three‑property ceiling: the finance‑first playbook for scalable portfolios
Most Australian investors don’t stall at three properties because they run out of ambition — they run out of borrowing capacity. The ceiling is a finance constraint disguised as an asset problem. The ...Read more
Property
Gen Z's secret weapon: Why their homebuying spree could flip Australia's housing market
A surprising share of younger Australians are preparing to buy despite affordability headwinds. One in three Gen Z Australians intend to purchase within a few years and 32 per cent say escaping rent ...Read more
Property
Tasmania’s pet-positive pivot: What landlords, BTR operators and insurers need to do now
Tasmania will soon require landlords to allow pets unless they can prove a valid reason to refuse. This is more than a tenancy tweak; it is a structural signal that the balance of power in rental ...Read more
Property
NSW underquoting crackdown: the compliance reset creating both cost and competitive edge
NSW is moving to sharply increase penalties for misleading price guides, including fines linked to agent commissions and maximum penalties up to $110,000. Behind the headlines sits a more ...Read more
Property
ANZ’s mortgage growth, profit slump: why volume without margin won’t pay the dividends
ANZ lifted home-lending volumes, yet profits fell under the weight of regulatory and restructuring costs—an object lesson in the futility of growth that doesn’t convert to margin and productivityRead more
