One of the biggest questions facing people living in Australia today, is whether they should rent, or buy property. With the housing crisis in full swing, it’s becoming more difficult for first-time buyers to get their foot onto the property ladder – an issue that has prompted some people to begin thinking about whether renting a home might be more effective than buying a property.
Rentvesting is a solution that might be able to offer some people the best of both worlds when it comes to getting onto the property ladder. For those who haven’t heard of this term before, “rentvesting” applies to a concept where someone who can’t afford to buy a property in the area that they’d like to live in, rent a property there instead, while buying a property in a cheaper area. They live in their rented property, while renting their purchased property to a tenant.
Explaining Rentvesting and What It Means to You
At Home Loan Cash Back, we help customers with applying for a host of different home loans depending on their individual needs. Owning a home is often the cornerstone of many great Australian dreams, but thanks to the rising property prices, it’s becoming more difficult for various aspiring homeowners to get onto the property ladder.
Breaking into the property market can be a difficult task for first-time buyers, which is why rentvesting has become such a popular solution. Instead of buying the property you want, rentvesting allows you to rent a home and then go on to invest your leftover money somewhere else. For instance, if you wanted to buy a three-bedroom home in Sydney, but the sale price means this property is out of your reach, you’d rent that house, then buy a property elsewhere that you can use to make money.
The property you buy can be rented out to help you with covering your own rental payments, and it also means that you have a property that you can sell at a later date to increase capital gain.
Why is Rentvesting so Popular?
In simple terms, rentvesting allows you to access to the lifestyle that you want now, while making sure that you get a foot in the property market for the future.
To help you understand the concept a little better, let’s look at another example. For instance, let’s say that buying your dream home would lead to repayments on your mortgage of around $4,000 per month. However, if you rented a home in the same area, those costs would go down to $2,000 per month. That leftover money that you wouldn’t be spending while renting could leave you with cash to invest.
Rentvesting is allowing people to overcome the idea that “rent money” goes nowhere. Rentvesting allows you to use your renting pattern as a part of an effective overall investment strategy.
Can You Help me with Rentvesting?
At Home Loan Cash Back, we can help you with various aspects of rentvesting, including applying for the mortgage that you’ll need to purchase the home that you’d like to rent out to other individuals.
On top of that, not only will you be making money on your purchased property from the person that you rent it out to, but you’ll also be earning an income with us too. After all, with Home Loan Cash Back, you get 50% of all the commissions that we receive, which can make rentvesting an even more appealing opportunity for young and budding homeowners.
