{"id":19983,"date":"2018-01-25T01:00:14","date_gmt":"2018-01-24T14:00:14","guid":{"rendered":"https:\/\/www.realestatetalk.com.au\/?p=19983"},"modified":"2018-01-25T01:00:14","modified_gmt":"2018-01-24T14:00:14","slug":"what-you-need-to-know-about-rentvesting","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/what-you-need-to-know-about-rentvesting\/","title":{"rendered":"What you need to know about rentvesting"},"content":{"rendered":"

The \u201cA-word\u201d is in the headlines a lot lately isn\u2019t it?
\nWhen we say that, of course, we mean affordability.
\nWould-be homeowners in Sydney and Melbourne are finding it increasingly difficult to get a foothold in the market.
\nThe great thing is that plenty of potential property owners aren\u2019t giving up.
\nNo, instead they\u2019re adopting some lateral thinking to solve a problem that really isn\u2019t that new.
\nFor an increasing number of people, buying the family home (and achieving the Great Australian Dream) in a suburb they actually want to live in is becoming more difficult.
\nSo what generally happens?
\nPeople take a big breath, adjust their expectations and are forced to\u00a0buy a property<\/a>\u00a0in the outer suburbs \u2013 but at least they have a home, right?
\nBut then reality sets in when the usual 60-minute drive to work (which used to be a 15-minute tram or train ride when you rented closer to the city in a funky suburb) turns into a 90-minute drive because of increased congestion on the roads.
\nThe same occurs on the way home, so you\u2019re not walking through the front door until 8pm when the dinner is cold and the kids or pets are already asleep.
\nSome people call this \u201creality\u201d. Some call it the \u201crat race\u201d. But is there another way?<\/p>\n

The rise and rise of rentvesting<\/h3>\n

\"Need
\nRentvesting is an alternative property strategy, where you rent where you want to live and then\u00a0purchase an affordable asset<\/a>\u00a0somewhere else.
\nThat property hopefully grows in value because it\u2019s in a smart location where the rental income contributes largely, if not fully, to the mortgage repayment.
\nSmart investors may even take out a principal and interest loan against their investment property and treat this as a \u201chome loan\u201d so they\u2019re paying down the loan in addition to receiving the capital growth and tax benefits of owning an investment property.
\nSo when we say \u201crentvesting\u201d, we mean you\u2019re renting in a suburb that you want to live in, have the lifestyle you want and, most importantly, you haven\u2019t lost about two hours commuting to an outer-ring suburb because that was all you could afford.
\nBut what happens next? Will you ever own your family home or will you rent forever?<\/p>\n

Do you need a \u201chome\u201d at all?<\/h3>\n

Some people want a property to call their home, raise a family there, and never move \u2013 which is perfectly understandable.
\nBut what if you never owned a home?
\nInstead, you rented a quality property and still established stability for your family by signing a five or even 10-year lease?
\nBy not owning a home you never have to spend a cent on the property you live in \u2013 that is the responsibility of the landlord.
\nYou never have to worry about the garden, you never have to renovate and, for us, this means that you\u2019ll never have to spend Saturday mornings in Bunnings or IKEA!
\nOn the other hand, if any of your investment properties need maintenance, your property manager takes care of it and you do not have to lift a finger.
\nAgain, we are saving\u00a0time<\/em>\u00a0that we can instead spend with our family and friends.
\nBut what happens when you retire in 30 years\u2019 time and you have rented for most of your working life?<\/p>\n

The retirement reality for rentvestors<\/h3>\n

\"RetirementWell, maybe you have managed to purchase a family home in that time in a suburb you want to live in.
\nBut if you have never managed to buy your family home and instead have, for example, bought five quality investment properties, where does that leave you?
\nIn theory, you could have investment properties that can provide you and your family with income streams in your retirement in addition to your superannuation and other investments.
\nOne of the income streams could pay your rent, so effectively you live rent-free for the rest of your days.
\nYour children could live in one or two of the properties and also pay you rent until they inherit the properties, which they can then continue to live in or rent out.
\nAny other rental income is just the cream on top.
\nOr perhaps you sell down some of your portfolios to buy a property outright in the suburb where you\u2019ve always dreamed of retiring.
\nNow compare this to the alternative \u2013 you could have purchased a home in an outer suburb\u00a0and spent your working life travelling two hours to work each day.
\nThere may have been minimal capital growth on this outer-ring home, you may have only been able to purchase one investment property as an additional income stream, and you have received minimal tax benefits compared to owning a number of investment properties.
\nAt the end of the day, though, it is all about choice.
\nSome will do anything to achieve the \u201cAustralian dream\u201d of owning a home but we need to remember that it is just a property.
\nOne day you will move out and someone else will move in.
\nBut if you can move past the mainstream view of home ownership and see the financial and lifestyle benefits of rentvesting, it could lead to\u00a0greater happiness<\/a>\u00a0and financial freedom much sooner rather than much later \u2013 or even not at all.
\nDisclaimer:<\/em>
\nThe information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The \u201cA-word\u201d is in the headlines a lot lately isn\u2019t it? When we say that, of course, we mean affordability. Would-be homeowners in Sydney and Melbourne are finding it increasingly difficult to get a foothold in the market. The great thing is that plenty of…<\/p>\n","protected":false},"author":176692471,"featured_media":19984,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2,13,25],"tags":[70],"class_list":["post-19983","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-andrew-mirams","category-latest-story","category-sponsored-channels","tag-featured"],"yoast_head":"\nWhat you need to know about rentvesting - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/what-you-need-to-know-about-rentvesting\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What you need to know about rentvesting - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"The \u201cA-word\u201d is in the headlines a lot lately isn\u2019t it? 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