Rentvestor, a popular term that has been floating around the real estate industry for a while, refers to those who continue to rent in inner-city locations while gaining equity in property in more affordable areas. And what started out as a trend among young first-home buyers has become a strategy for families and retirees who want more flexibility.
“With property becoming more expensive in major cities, people are turning to rentvesting as an opportunity to gain equity in property while living a lifestyle they desire,” says National New Business Manager for Belle Property and Auctioneer, Andrew Robinson. “You only need to look to other major world cities to see that rentvesting is a trend that is here to stay – people simply don’t want to sacrifice on the convenience and lifestyle of inner-city living.”
With many first-home buyers priced out of the property market in Australia’s major cities, the outer suburbs and regional areas are starting to look a lot more attractive to rentvestors. There is also the added benefit of a certain level of freedom and flexibility – if their financial situation changes, they need to relocate for work or want to travel, rentvestors can move without the need to sell first.
As part of a broader strategy, rentvestors typically take advantage of opportunities to purchase a house or townhouse with the idea of moving in to when their life circumstances change. Retirees are opting to sell their large homes and invest their equity in several properties in outer areas while still having a smaller, more manageable place in the CBD. This gives them the flexibility to lock up and go on a whim.
“Rentvesting is a good strategy but they key is to buy well. Look at areas that will have long-term growth, are close to major city centres and amenities, including public transport,” says Andrew.