With property prices continuing to rise, many homebuyers are looking for creative ways to enter the market. One strategy that has gained popularity is rentvesting—a method where you rent in your preferred location while investing in a property elsewhere.
Rentvesting is becoming increasingly common as affordability challenges push people to rethink the traditional path of homeownership. Instead of committing to a 30-year mortgage in an expensive suburb, rentvesting allows you to live where you want while making smart investment decisions.
Our Rentvesting Journey
For us, rentvesting was a game-changer. We own a great home in the suburb where we grew up, but when it came to schooling and lifestyle for our children, we wanted something different. Rather than stretching financially to buy in an area that fit our current needs, we chose to rent there instead—while continuing to invest in high-growth locations. This approach ticked all the boxes for us, and we’ve seen similar success for many of our clients.
The Key Benefits of Rentvesting
Many of Australia’s best suburbs—especially in Sydney and Melbourne—have skyrocketing property prices but relatively low rental yields. This means renting in these areas is often much more affordable than buying, allowing you to enjoy the lifestyle benefits without the burden of a massive mortgage.
Instead of forcing yourself into an expensive home loan, rentvesting allows you to buy in areas with high growth potential and strong rental yields. This means you can build wealth faster while maintaining the flexibility to live where you choose.
By renting where you live and investing elsewhere, you can benefit from rental income that helps pay off your investment property. If structured correctly, tenants effectively contribute to your mortgage, and with the right strategy—such as adding a granny flat or renting out additional space—you can generate even more income.
Many homeowners feel ‘trapped’ by their mortgage, making it difficult to move when personal circumstances or market conditions change. Rentvesting eliminates that issue, giving you the ability to relocate as needed while still growing your property portfolio.
A Smart Strategy for Changing Markets
We’ve seen this play out in recent years. A few years ago, cities like Perth, Adelaide, and Brisbane had strong rental yields and significant growth potential—investors who got in early have done very well. Now, as Sydney and Melbourne show signs of a recovery, rentvestors have the opportunity to take advantage of the market upswing without being locked into a costly home loan.
Of course, rentvesting isn’t for everyone. Some people prefer the security of owning and living in their own home, which is completely understandable. However, if you want to maximise your wealth-building potential while maintaining lifestyle flexibility, it’s a strategy worth considering.
Changing the Mindset Around Homeownership
Many of us grew up believing that homeownership means buying where we want to live. But in reality, the smartest financial decisions often come from separating where you live from where you invest.
For us, rentvesting has been the best of both worlds—we enjoy our ideal lifestyle while continuing to build a strong investment portfolio.
If you’re feeling weighed down by rising property prices or struggling to enter the market, rentvesting might be the solution you’ve been looking for.
Want to explore how rentvesting could work for you? Get in touch with us today.