A term that we are hearing more and more in recent times is ‘rentvesting’, but what exactly is it, and how does it work?
‘Rentvesting’ refers to the concept of buying an investment property while continuing to rent a separate primary residence. Many people living in capital cities, buying a home in their area is often a long-term goal as opposed to something they can afford to do right now. To be able to invest in property, they need to look somewhere other than the place they live and work.
Benefits of rentvesting allows people to invest in property while living and working in a different place. The primary benefit of rentvesting is being able to live and work in the place you want, while still building equity in a property. In many ways, you get the best of both worlds with respect to renting and buying. You’re the owner of a property, so you’re able to capture any capital gains that arise over time; you’re also a renter, meaning you have the flexibility to move somewhere easily should you want to.
While rentvesting is a viable strategy for building wealth, it’s not without its downsides. You need to have sufficient income to cover both the mortgage payments on your investment property as well as the rent on your primary residence. The rental income from your investment property can help with this, but it often won’t cover it entirely.
To check out properties on the Sunshine Coast that we have available for purchase, check out our sales page.