Hey there! Are you a millennial struggling to afford a home of your own? Don't worry, there's a strategy that might work for you called Rentvesting.
This approach breaks the traditional rules of homeownership that the older generation preached about, but why should we always listen to them? We've also learned to safely make connections online and use rideshare apps to get home, even though our parents warned us against it.
So, what is Rentvesting exactly?
It's pretty simple - you rent a place to live in your desired location while investing your money in real estate in a more affordable area.
This way, you can maintain your desired lifestyle and live close to your work, family, and friends, while also building equity in your investment property and creating wealth.
That's why it often makes more financial sense to rent in your desired suburb and invest in property elsewhere.
Plus, if your budget is limited to apartments, it may be more financially beneficial to invest in landed property in a different area.
Of course, Rentvesting isn't for everyone, so let's take a look at some of the advantages and disadvantages.
Advantages include maintaining your desired lifestyle, finding more affordable markets than your desired area, having greater flexibility in future plans, and having investment expenses be tax-deductible.
On the other hand, disadvantages include decreased security through renting, higher loan-to-value ratios required, sacrificing first home buyer grants (although this can be mitigated by investing interstate), and being liable to land tax and capital gains tax.
If Rentvesting sounds like the right fit for you but you're not sure how to get started, you can ask Oli to run through some scenarios with you and guide you on your investment journey.
Ask Oli to find out more!
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