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Rentvesting: Why this could be your smartest investment move.

Caption: Balmoral Beach, Sydney NSW. Image Credit: Sitchu Sydney. 

Are you eager to join the ranks of property owners but find yourself priced out of your desired neighbourhood? What if there was a way to keep your beachside lifestyle without breaking the bank on a mortgage? Enter rentvesting: a savvy financial strategy allowing individuals to rent where they want to live and invest in property where it's affordable. This innovative approach means you don't have to sacrifice your current lifestyle pleasures for the sake of property ownership. In this blog post, we delve into the intricacies of rentvesting and provide valuable insights to help you navigate this increasingly popular strategy.

What is rentvesting?

Rentvesting is a form of real estate investment that involves renting a residence in an area where you prefer to live—often due to lifestyle choices or career requirements—while owning and leasing out a property in a more budget-friendly market. This strategy leverages the potential for capital growth and rental yield in emerging areas, allowing you to build wealth while enjoying the perks of your ideal location. The concept of rentvesting offers a compelling alternative for those seeking to invest in property without compromising their current lifestyle.

Things to consider.

Before rentvesting, there are a few essential things to consider:

  • Financials: Assess your financial status and determine how rent and mortgage commitments will fit into your budget.
  • Investment goals: Clearly define your goal. It is long-term capital growth, rental income, or a combination of both?
  • Market research: Identify potential growth areas that offer affordable entry points and promising returns.

The pros and cons of rentvesting.


  • Lifestyle: You can maintain your lifestyle in an area that suits your personal and professional life without the hefty price tag of buying there.
  • Investment diversification: Investing in different geographic locations can diversify risks associated with real estate markets.
  • Cash flow management: Rental income from your investment can help manage loan repayments and property costs, potentially leading to positive cash flow.


  • Lack of stability: Renting does not provide the same security as homeownership, with potential risks including eviction or rent increases.
  • Additional responsibilities: Owning and managing a rental property, especially in another area, adds complexity to your financial situation.
  • Market volatility: Investments carry risks, and there's no guarantee that property values will always rise. 

Tax benefits of rentvesting.

One of the appealing aspects of rentvesting is the potential tax advantages. Investors can often deduct costs associated with owning and managing a rental property, including interest on loans, property management fees, repair and maintenance costs, and depreciation. These deductions can significantly reduce your tax, making it a financially attractive strategy.

The rentvesting strategy.

To effectively implement a rentvesting strategy, follow these steps:

  • Set clear objectives: Understand what you want from your investment—cash flow, capital gains, or both.
  • Choose the right property: Look for properties with high growth potential and strong rental demand.
  • Secure financing: Work with financial institutions to find the best mortgage options that align with your investing strategy.
  • Manage your property efficiently: Consider whether self-management or hiring a property manager is right for you.

Where to start.

Are you ready to explore the possibilities of rentvesting? Start by seeking professional advice and contacting a knowledgeable financial planner or accountant. With an expert opinion, understanding the dynamics of different markets and aligning them with your financial capabilities and goals can pave the way to a successful investment strategy.

Steps for rentvesting success.

  1. Save, save, save: The larger your deposit, the less you will have to borrow, which means a better chance of receiving finance, paying less interest, and borrowing without the lender's mortgage insurance.
  2. Do your research: Before investing in any property, you must understand its true market value. Research what similar local properties have recently sold or are currently selling for and historical data on how the local property market has performed over the years. By researching local rental prices and current vacancy rates, you can get a clear picture of how much a property could rent for, understanding local demand for rentals.
  3. Do the math: Rentvesting is not a cheap option, and property investment is a substantial financial commitment, so take the time to do the sums. Make sure you understand the property's potential yield and return.
  4. Think long term: Look for property in an area with high potential price growth in the long term. It could be in a few years, even if somewhere might not be the hottest location.
  5. Keep additional costs in mind: There are a lot of ongoing costs associated with property ownership that should be factored into your budget. Always keep this front of mind.
  6. Follow your head not your heart: Buying an investment property should not come with the same emotional engagement as purchasing a home. Focus on the property's potential return rather than emotional connection.

Rentvesting isn't just a clever way to break into the housing market; it's a strategic choice that allows you to optimize your financial investments while living where you thrive. By carefully planning and seeking the right advice, you can enjoy the benefits of both worlds: investing wisely while living your ideal lifestyle. This approach makes financial sense and keeps your life's enjoyment on track. So why wait? Dive into rentvesting and watch your property portfolio and lifestyle options expand.