Could the next generation of home buyers become savvy Rentvesters?

Buying a home is still very much the great Australian dream, but with property prices climbing in many of the suburbs people actually want to live in, that dream can start to feel out of reach. If you're in your twenties or thirties and feel like the goalposts keep moving, you're not alone, and you're not out of options.

One strategy more buyers are turning to is called rentvesting. Put simply, it means renting where you want to live and buying where you can afford.

What is Rentvesting?

Rentvesting involves purchasing an investment property in a location that suits your budget, while continuing to rent in the area where you'd actually like to live. Instead of trying to buy your dream home straight away (and potentially overstretching to do it), you get a foot in the property market sooner, in a way that's financially realistic.

It's not the right fit for everyone, but if affordability is your main barrier to buying, it's well worth considering. At the end of the day, you can't pay your mortgage with sentimentality, your home needs to work for your finances too.

Why consider Rentvesting?

Why might rentvesting suit your situation?

There are several reasons younger buyers are exploring this approach:

• A smaller deposit, sooner. Buying in a more affordable area generally means a smaller deposit, which means less time spent saving and a faster path to ownership.

• Rental income can help with repayments. Once you have tenants in your investment property, that rental income can go towards your mortgage, easing the financial pressure.

• Potential tax benefits. Unlike a loan for your own home, a loan for an investment property may be tax deductible, which could make a difference at tax time.

• You still get to live where you want. Renting in your preferred location means you don't have to give up lifestyle factors like being close to the city, the beach, work, or family, while your investment works away in the background.

Feeling stuck on your property journey?

If you've been saving for a while and still feel like ownership is out of reach, or you've started to wonder if it'll ever happen for you, rentvesting could be the shift in approach that gets things moving again.

Talk to the right people first

Before you go further, it's worth having a conversation with a mortgage broker, but not just any broker. Look for someone who can cut through the jargon and give you straightforward, honest advice about where you stand financially and what you can realistically afford.

Found a property? Here's what happens next

Congratulations, finding the right property is a big step.

Once you've received a contract of sale, the next move is to have a solicitor review it. They'll explain exactly what the contract means for you, including your rights and obligations as a buyer, so you can move forward with confidence rather than guesswork.

Want to learn more about buying a home?

If you'd like a deeper understanding of the home buying process from start to finish, our three part blog series "Buying a Home" walks you through how it all unfolds, and how a property law and conveyancing team can support you along the way.

The key takeaway

Rentvesting can offer a more affordable, financially smart way to enter the property market, especially if your decision is guided by numbers rather than emotion.

That said, buying or selling property is a major decision, and one that often comes with a fair amount of stress. Misunderstanding the terms of a sale can lead to costly mistakes, which is why it's so important to have a property lawyer in your corner. They'll help make sure you fully understand everything before you sign on the dotted line.

How CPC Lawyers can help

If you're thinking about buying or selling property and want clear, practical legal advice, call us on (08) 7325 0219 to book an appointment with one of our experienced solicitors.

Our experienced property law team can assist with:

• Reviewing and advising on your contract of sale

• Explaining your cooling off period rights

• Advice on waiving the cooling off period (Form 3)

• Guidance on meeting lender requirements

• Advice relating to building contracts.

Disclaimer: The information provided on this article is general in nature only and does not constitute personal financial, or legal advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website, you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.