What is rentvesting? Could you make it a New Year Goal to become a rentvestor?
Rentvesting is a strategy where a person rents a home in an area they desire and purchase in another area. It’s probably not the first time you’ve heard of this term, but if you’re new to the real estate market there is probably a few facts that you don’t know about this buying strategy.
Here are five unknown facts about rentvesting:
- You can maintain your desired lifestyle with rentventing
Are you living at home or renting in a trendy inner-city suburb?
You may feel like living the dream life in a good neighbourhood, until it dawns on you that you’re still living with your parents or you’re living in the city with all the amenities and attractions, but you’re always short on cash.
Through rentvesting, you’re on the pathways towards property ownership while living your present lifestyle in the neighbourhood you like.
One of the major factors to consider when purchasing a home is location, and being without the means to obtain property in the area you desire is typically an enormous obstacle to people wanting to enter the market. It’s also a tempting option for people who always travel for work or like a more flexible lifestyle.
By giving you easy access, rentvesting allows you to boost your capital wealth with property, without sacrificing your lifestyle choices.
- You expand your options… to across Australia with rentvesting
Another of rentvesting’s draw is you can basically buy in any popular property market in Australia – because you will not be residing in the home you’re not confined to a local area.
There are sections of suburbs across Australia that are enjoying fast growth and astronomical rental income, but remain more affordable compared with major cities such as Melbourne, Sydney or even Newcastle’s inner city.
There is no risk of loss from buying property without seeing it, in a market where you’re not familiar.
What you need to do is conduct research and go to the location before you purchase in order to become familiar and make sure the property meets your standards.
It is also recommended that you keep up to speed with any taxes, fees and other expenses imposed by the specific state where you’re buying to avoid being caught unaware by unforeseen expenses.
- You can enter the market sooner with rentvesting
One of the major challenges for first-home buyers is saving for a deposit. It’s a fact that it can take you years to save for your forever home.
But because rentvesting lets you invest in another region, or in an outer suburb that is more within your reach, you will need to save just a smaller amount of deposit. This mean you can jump into the market sooner.
- Rentvestors could benefit from high rental yield areas
Minimising costs and increasing income is the key to boosting your cash flow in the investment property market.
Taking note of that, don’t be too focused on capital growth. Instead, focus on high rental yields. This income will help keep you afloat while you juggle paying cash for your investment property and paying rent in your desired location.
- You could further offset your own rent with practical measures
How can you further increase your income through rentvesting?
- A rentvestor is an investor, and there are several simple and practicals approaches to boost your cash flow as a landlord.
- Permitting pets
- Raising rent, in accordance with market performance; and Renting out add-ons in your property, like storage spaces and parking spaces.
These are easy ways to boost your rental income, in effect your cash flow, through your investment property all while you are living in a beautiful property in a suburb you like.