Interesting statistics that have come from finder.com.au, reveal that 4/10 Australians are currently renting, and of those, only 19% are planning to buy property in the near future. When comparing these statistics to census data from 2016, there has been a 9% increase in the population who are now renting across Australia.
It is likely, that the spike in house & land prices has pushed some potential home owners out of the property market. It is because of this, the new trend of “rentvesting” has become popular, and now 5% of Australian’s are engaged in this process.
Rentvesting is when a person rents in the location that suits their lifestyle best, whilst owning an investment property at the same time. Most of the time, rentvester’s purchase their investments in newer, upcoming suburbs and estates that produce strong capital gains over long periods of time.
First home buyers are not the only one’s rentvesting, as Dale Gillham (Chief Analyst at Wealth Within) explains, “I’ve got an investment property and I’m moving to a $5 million home in the countryside”. He also, went on to explain the benefits of rentvesting for people who work from home “I’m making money elsewhere and the house I’m moving to, half of that I’m going to claim on tax, because I’ll run my office out of there”.
Counter to Mr Gillham’s support for rentvesting, a recent survey found that rentvesting was the most stressful way to own property (Source: HashChing – Mortage Marketplace).
What are your thoughts on rentvesting? Do you think this is a good strategy for people who may not be able to afford property in their ‘ideal’ location?
Let us know in the comments below!