There isn’t a week that goes by where the media hasn’t run a story about Australia’s growing housing affordability crisis and young couples preferring to eat their avocado-smash breakfasts at the local café instead of purchasing real estate.
I’m sure you’ve heard the phrase “You can’t have your cake and eat it (too)” well I disagree!
Rentvesting may be the key for aspiring property owners to get their foot on the property ladder. Rent somewhere to live and buy an investment property.
A strategy to rent and invest in real estate has many advantages, you can live in an area that suits your lifestyle and purchase a property in a location that suits your budget. This means you’re not restricted to locations and you can time your real estate purchase to coincide with the right stage of the property cycle. To maximise your profits, always aim to buy at the bottom of the property cycle or as the market starts to rise.
Another benefit of rentvesting is that you can spread your risk of a down turn by purchasing in several different locations (the too many eggs in one basket theory). Plus, if you have several cheaper investments and one becomes vacant it won’t drastically affect your cash-flow.
Rentvesting isn’t a new strategy, it’s just a new catch phrase and has become more popular as property prices have become more expensive in Sydney and Melbourne. While we’re talking prices, if you think these capital cities will be declining anytime soon, don’t kid yourself! The likely outcome will be a period of stagnated growth.
A rentvesting strategy may be an opportunity for you, buying several cheaper investment properties can potentially be a way to build wealth faster than buying one more expensive home.
My parents always said, “You’ve got to own a property”, so from an early age I worked two jobs and saved towards a deposit, I purchased my first house when I turned 20. Let’s be clear, this wasn’t my dream home in the best location but I was able to gain a foothold in the property market.
It didn’t take long before I caught the real estate investment bug and began a journey of real estate education, after countless hours of research, I learnt that there was more money to be made by leveraging off the equity to grow a portfolio of investment properties. The ultimate goal is to compound your wealth using the banks money and have tenants to pay your mortgage.
Armed with more knowledge and a fresh strategy, I choose to rentvest so I could continue to add more real estate to my portfolio. After some of my properties had experienced significant growth, I sold a few and purchased another main residence. This time with much less debt which allowed me to continue to grow my portfolio with well-located investments.
At Worth Property Investing we help first-time and long-time property investors make smart property investment decisions. If you’re ready to invest but don’t know where to start, then talk to us. Just send me an email and we’ll set up a time to chat.
“We were referred to Simon and we have never looked back. The incredibly high level of service, professionalism, guidance and ongoing progress reporting we received as he led us through the process to achieving settlement made the whole process of purchasing an investment property incredibly easy.
We highly recommend Simon if you are looking for absolute confidence and quality”
Graham Thom & Lisa Heather – Heathcote, Sydney