Put simply, Rentvesting is a term that is used when you rent where you really want to live and you purchase an investment property elsewhere which generates enough cashflow to cover your rental expenses.
Without the proper guidance, you could end up buying in a suburb with a high vacancy rate, making the gap between your repayments and rental income larger to be covered.
That is why here at One Central Property, we have helped hundreds of Millennials to find the best property deals that the Australia Market has to offer, properties almost guaranteed to be positive cash-flow from day one.
In today’s market, there are many opportunities to find rental property in the locations you want to live but can’t afford to buy in.
Sydney is a good example where the average price of property close to the city has become unsustainable for any young first time buyer and they often wonder how they will enter the property market.
Data from SQM research indicates Sydney CBD’s vacancy peaked during May 2020. Since then, it has gradually decreased but still has not recovered to pre-covid rates.
As a result of this, more and more city workers are given the flexibility to work from home, providing them the idea that perhaps moving away from the city was increasing their quality of life for their families.
The opportunity to move to regional areas has never come at a better time where first home buyers are open to more affordable options as well as purchasing houses rather than apartments in the city. ABS research shows that throughout 2020, 43,000 Australians moved to regional areas from capital cities.
Our client wants to buy a 2 bedroom apartment in Petersham that would cost close to $900,000. This would require over $100,000 in deposit plus other costs associated with purchasing property including legal cost, mortgage application fees etc.
Grants like the First Home Deposit Scheme highlights that you only need 5% deposit however your repayments are only going to be higher than renting in the same area and you will be put into a position where the equity uplift will not be available for at least 5 years as the Loan to Value Ration (LVR) is too high.
In comparison to purchasing property Interstate, where a new 4 bedroom double storey dwelling with a double lock-up garage in the Central Coast would cost under $600,000. This gives a major boost for first home buyers as not only they are buying property with a land component.
They are also investing in a regional NSW area that has resulted in a value of uplift of 19.6% in the last 12 months alone.