{"id":6615,"date":"2015-12-09T10:00:18","date_gmt":"2015-12-08T23:00:18","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=6615"},"modified":"2015-12-09T10:00:18","modified_gmt":"2015-12-08T23:00:18","slug":"the-rise-of-the-junior-investor-john-mcgrath","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/the-rise-of-the-junior-investor-john-mcgrath\/","title":{"rendered":"The rise of the junior investor &#8211; John McGrath"},"content":{"rendered":"<p><strong>It&#8217;s not all bad news about the youth of today.<\/strong><\/p>\n<div>\n<div id=\"main\">\n<article id=\"post-56596\">In his column in\u00a0<a href=\"http:\/\/www.switzer.com.au\/the-experts\/john-mcgrath-property-expert\/the-rise-of-the-junior-investor\/\" target=\"_blank\" rel=\"noopener noreferrer\">Switzer<\/a>, John McGrath looks at the rise of RentVesting and how generations compare when it comes to buying property.<br \/>\n<\/article>\n<\/div>\n<\/div>\n<h4>Here&#8217;s what he had to say:<\/h4>\n<p>More young Australians are becoming junior investors, with most of them \u2018RentVesting\u2019 to enable a start in property without compromising their lifestyles.<br \/>\nAs discussed in our recent annual McGrath Report, RentVesting is one of the most important emerging property investment trends in Australia today.<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright\" alt=\"John Mcgrath\" src=\"https:\/\/i0.wp.com\/puassets.s3.amazonaws.com\/wp-content\/uploads\/2015\/07\/JohnMcgrath-e1436853066209-300x234.jpg?resize=300%2C234\" width=\"300\" height=\"234\" \/><br \/>\nThis is where young buyers \u2013 typically Gen Y, purchase their first property for investment purposes rather than living in it themselves.<br \/>\nUnlike the Gen X and Baby Boomer buyers before them, Gen Y is not willing to sacrifice their lifestyle in order to own real estate.<br \/>\nWhile Gen X and the boomers didn\u2019t mind purchasing in affordable locations on the outskirts of a city and often far away from work, beaches and CBD nightlife, Gen Y doesn\u2019t want a bar of it.<br \/>\n<strong>They certainly share their predecessors\u2019 desire to own property but lifestyle is priority one.<\/strong><br \/>\nSo they\u2019re buying for investment first in affordable suburban areas while renting in the trendy inner city locations that are priced beyond their means.<br \/>\nOther Gen Ys are remaining at home with mum and dad to save as much money as possible before flying the coop.<br \/>\nThese junior investors are typically buying in middle to outer ring suburbs where rental yields are strong and the bulk of the rent covers the mortgage (or possibly all of it with interest rates so low right now).<br \/>\nThis means little out-of-pocket expenses, little financial impact on their lifestyles and a great starting point in property.<br \/>\nOnce you\u2019re in the market, it becomes much easier to buy other properties (either more investments or the dream family home) down the track with accrued equity.<br \/>\nHats off to these buyers.<br \/>\nThis is a fantastic example of markets evolving as property values rise and lifestyle areas become unaffordable for those just starting out in real estate.<\/p>\n<h4>Rentvesting really took off after the First Home Owner Grant changed<\/h4>\n<p>When it was first introduced, the grant was available for all types of first home properties.<br \/>\n<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright\" alt=\"sold for sale suburb street neighbourhood plan map location\" src=\"https:\/\/i0.wp.com\/puassets.s3.amazonaws.com\/wp-content\/uploads\/2015\/06\/sold-for-sale-suburb-street-neighbourhood-plan-map-location-300x199.jpg?resize=300%2C199\" width=\"300\" height=\"199\" \/>When the rules changed and the grant became only available to newly built or off-the-plan properties, the incentive for young people to buy their first property for owner occupation was reduced.<br \/>\nRentvesting is a trend that just keeps on getting stronger.<br \/>\nA recent Mortgage Choice survey shows rentvesting has increased from 21% of investors to 37% over the past 12 months alone.<br \/>\n<strong>There are two other important trends among Australia\u2019s contingent of junior investors.<\/strong><br \/>\nFirstly, they are getting in early.<br \/>\nDomain research shows the average age at which Gen Y buys their first property investment is 25 years compared to 35 years for Gen X and 45 years for Baby Boomers.<br \/>\nSecondly, junior investors are building larger investment portfolios than their predecessors, who typically aimed to own their own home outright with maybe one investment.<\/p>\n<h4>There\u2019s a few reasons for this<\/h4>\n<p>They definitely want to mitigate uncertainty over the future of the pension; and they understand that their superannuation is unlikely to be enough on its own when they retire.<br \/>\nSo they need growth and income assets to support themselves.<br \/>\nIn addition, Gen Y is a far more inventive and aspirational generation.<br \/>\nIt\u2019s not uncommon to hear 25-year-olds talking about retiring by 40; and unless they\u2019ve invented the latest app that\u2019s going to make them millions, they\u2019re realising they need assets to fund their mid-life retirement dreams.<br \/>\nToday, Domain research shows 16% of Gen Ys already own two or more properties compared to only 17% of Gen X and Baby Boomers.<br \/>\nWhat a fantastic start to building wealth.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It&#8217;s not all bad news about the youth of today. In his column in\u00a0Switzer, John McGrath looks at the rise of RentVesting and how generations compare when it comes to buying property. Here&#8217;s what he had to say: More young Australians are becoming junior investors,&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":5625,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[33,13,17],"tags":[],"class_list":["post-6615","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-case-studies-topic","category-latest-story","category-property-investment"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The rise of the junior investor - John McGrath - 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\/the-rise-of-the-junior-investor-john-mcgrath\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The rise of the junior investor - John McGrath - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"It&#8217;s not all bad news about the youth of today. In his column in\u00a0Switzer, John McGrath looks at the rise of RentVesting and how generations compare when it comes to buying property. Here&#8217;s what he had to say: More young Australians are becoming junior investors,...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/channels.realty.com.au\/realtytalk\/the-rise-of-the-junior-investor-john-mcgrath\/\" \/>\n<meta property=\"og:site_name\" content=\"Realty Talk\" \/>\n<meta property=\"article:published_time\" content=\"2015-12-08T23:00:18+00:00\" \/>\n<meta name=\"author\" content=\"rolanrush\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rolanrush\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/\"},\"author\":{\"name\":\"rolanrush\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"headline\":\"The rise of the junior investor &#8211; John McGrath\",\"datePublished\":\"2015-12-08T23:00:18+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/\"},\"wordCount\":635,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"articleSection\":[\"Case Studies\",\"Latest Stories\",\"Property Investment Topics\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/\",\"name\":\"The rise of the junior investor - John McGrath - Realty Talk\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"datePublished\":\"2015-12-08T23:00:18+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/#primaryimage\",\"url\":\"\",\"contentUrl\":\"\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-rise-of-the-junior-investor-john-mcgrath\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The rise of the junior investor &#8211; John McGrath\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\",\"name\":\"Realty Talk\",\"description\":\"Your Trusted Voice For Property Investing. 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