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Is 'rentvesting' actually a thing?

It looks like it is!!! 'Rentvesting' is a relatively new term used by people who are opting to continue to rent while purchasing an investment property.

It appears that there has a rise in 'rentvesting' for those who:

  • need to live where they work but don't love the area enough to buy there and want to get into the property market

  • are living at home and can save lots more than if they were renting outside while contributing to an investment property

  • want to rent a home that they can't afford to buy but can afford a house in a different area

It seems to be most popular in areas where purchasing a property is overtly expensive and also those where a casualisation of the workforce and shorter contracts increases the likelihood of an employee's portability.

It can sound like a good plan especially if, instead of renting, you could continue to live at home paying a little bit of rent to mum and dad or they might even spring you for the rent and let you save (of course you might have to really save though!!!).

However, there are a few things to consider like these:

  • Tax implications - you'll need to talk to an accountant

  • First Home Owner Grant implications - buying an investment property before buying a house to live in would exclude you from receiving the grant

  • Capital Gains implication - another accountant question

Come and talk to me anytime if you'd like more info about the pros and cons.