Should you rentvest?

By Janet Spencer

Should you rentvest?

If you can afford to buy a property and you actually buy the right property, then the team at Buyer Solutions say “Yes”.

Many renters live in top quality locations with lots of amenity nearby.  They value proximity to shops, bars, restaurants, transport, parks, schools, hosptals and a high “walk score” all on offer in Melbourne suburbs like Fitzroy, St Kilda, Prahran, Camberwell, Northcote for example.

So when it comes to buying, the properties that are affordable may not be so desirable to comfortable inner city dwellers.  Fair enough.

So should they put off buying until thier deposit is high enough to afford a property where they currently rent and love to live?  Or, should they buy an investment property to secure a slice of the property market and rent it out – popularly known as a rentvest strategy to getting into the property market?

Renting where you want to live and buying where you can afford is a great long-term wealth creation strategy.  The concept is sound, but the property you select and buy will determine the effectiveness of the wealth creation of the time you own that property.

This is a great strategy to suggest to your adult children.  They could rent with friends, enjoy the share house experience but invest in a modest property that will grow wealth for them.  We should be encouraging young adults to save and invest and let their tenants help them pay off the loan whilst the property goes up in value.

Property doesn’t have to be lived in.  It doesn’t have to be overly restrictive.  It does need to be an investment that works for you creating equity over time in my opinion.

If you are not certain what attributes will drive capital growth, have strong tenant appeal and maximise occupancy for a property that you intend to rent out – GET INDEPENDENT PROFESSIONAL ADVICE.  We also recommend that this advice be from a REBAA accredited Buyers Agent.

If you are based in Victoria, Buyer Solutions can help and guide you and importantly prevent costly mistakes.  Your first time buying property you are most vulnerable to being pressured, being impulsive and buying the wrong property.  Or, some fist home buyers get fed-up, give-up and just buy.  You can’t afford to do this.  Seek help before that happens as your Stamp Duty in Victoria is around 5.5% of the purchase price of the property and this alone should be a huge disinsentive.

Buyer Solutions will be running information sessions for First Home Buyers and Rentvesters in 2017 and if you are interesting in attending please email our office on info@buyersolutions.com.au to register.

For independent advice on buying or selling real estate, contact Janet Spencer at Buyer Solutions +61 3 9816 8555 or email jspencer@buyersolutions.com.au

First home buyers, Home buying, Housing Affordability, Housing Market, State of the market

Buyer Solutions, buyers agent, first home buyer, melbourne real estate, rentvest