As property prices continue to rise, purchasing in a centrally-located or sought-after area is out of reach. Instead, many are opting to rent rather than buy as it means not having to compromise their inner city or beachside lifestyle. But for those who are still eager to enter the market, there is a way to get the best of both worlds.
‘Rentvesting’ is the term coined for when you purchase a property for investment purposes in an affordable location and continue to live and rent in the area of your choice. An example of how the market is evolving, it is a wealth creation strategy that is popular among the younger generation due to the flexibility it offers in comparison to being an owner-occupier.
Many buyers who want to enter the property market aren’t interested in purchasing a property in the outer suburbs and then having to commute into the CBD. Rentvesting allows your rental income to cover the mortgage expenses, so you can maintain a lifestyle with less cost. For this strategy to work, you’ve got to be a good saver and there needs to be a focus on delayed gratification. It’s all about living within your means. Don’t spend big at the start while you’re building it up. Step away from the mentality of negative gearing and tax minimisation and buy neutrally.
Speak to the team of finance and property experts at BlueKite Capital today. Call us on 1300 883 594 or email info@bluekitecapital.com.au