renting
Image – Canva.
  • The concept includes renting where you live and investing elsewhere
  • Has been gaining popularity
  • Is also considered an alternative to get on the property ladder

The concept of rentvesting is quite simple. The Property Tribune explored the idea in March last year, with Ben Plohl explaining:

“Some people rent in these locations [Cammeray, Mosman, Willoughby] already and have decided that it’s more affordable for them to continue doing so than stretch themselves too far financially to buy at the current time,” he said.

“Wisely, they are also deciding to make their available funds still work for them by buying elsewhere.

“For example, $900,000 may not secure you much real estate on the North Shore, but it could potentially buy you two houses in a more affordable capital city or major regional location, which are also experiencing strong market conditions.”

Simply put – rent where you want to live, and invest in another property.

More on rentvesting here.

The idea of renting where you live and investing elsewhere has been gaining popularity, with The Property Tribune also covering the idea as an alternative to the traditional Great Australian Dream of home ownership, and industry leaders telling The Property Tribune that the concept is well established among the cohort of new property owners.

Top 10 rentvesting suburbs $500K to $600K

Rank State Suburb Postcode Median sale price for houses Vacancy rate for houses Median yield price for houses
1 NSW Karuah 2324 $562,500 0.0%* 4.4%
2 TAS Claremont 7011 $560,000 1.1% 4.4%
3 TAS Invermay 7248 $502,000 0.8% 4.4%
4 VIC Wodonga 3690 $505,000 0.5% 4.3%
5 TAS Summerhill 7250 $535,000 0.6% 4.3%
6 TAS Kings Meadows 7249 $550,000 0.7% 4.3%
7 TAS St Leonards 7250 $535,000 1.3% 4.2%
8 VIC Tawonga South 3698 $565,000 0.0%* 4.1%
9 NSW Bega 2550 $582,000 1.2% 3.8%
10 NSW Woodberry 2322 $555,000 0.0%* 3.7%

Source: Well Money.

Well Money commissioned new research to find the top 30 rentvesting suburbs in Australia.

Well Money’s CEO Scott Spencer said he feels for first home buyers because conditions are tough:

“Prices are falling, which is making housing more affordable. However, prices are falling from a high base, so they’re still elevated,” he said.

“First home buyers who live in capital cities and have a budget of $500,000 to $800,000 have a tough choice to make.

“They can buy a unit in the inner or middle rings, which would give them a convenient location but maybe not the amount of space they want.”

Mr Spencer said the alternative was to purchase a house in the outer rings, but commutes may be offputting.

“That’s why rentvesting can be a great choice for some first home buyers, because it can give you the best of both worlds.”

Scott Spencer, CEO Well Money

“They can keep renting in the inner and middle rings and buy a house in a completely different location – one that not only fits their budget but also hs good long-term growth potential and good cashflow.”

Top 10 rentvesting suburbs $600K to $700K

Rank State Suburb Postcode Median sale price for houses Vacancy rate for houses Median yield price for houses
1 TAS Berriedale 7011 $620,000 0.7% 4.2%
2 TAS Norwood 7250 $603,000 1.4% 4.1%
3 TAS Mornington 7018 $630,000 0.0%* 4.1%
4 NSW Raymond Terrace 2324 $610,000 0.4% 4.1%
5 TAS Lutana 7009 $662,000 1.0% 4.1%
6 VIC Baranduda 3691 $610,000 1.2% 4.0%
7 NSW Mallabula 2319 $620,000 0.0%* 4.0%
8 NSW Wauchope 2446 $635,000 0.8% 4.0%
9 TAS Riverside 7250 $632,000 1.0% 3.9%
10 TAS Newstead 7250 $680,000 0.5% 3.8%

Source: Well Money.

Top 10 rentvesting suburbs $700K to $800K

Rank State Suburb Postcode Median sale price for houses Vacancy rate for houses Median yield price for houses
1 TAS Geilston Bay 7015 $770,000 1.0% 4.1%
2 NSW Medowie 2318 $770,000 0.8% 4.0%
3 ACT Charnwood 2615 $718,000 1.0% 4.0%
4 NSW Macquarie Hills 2285 $785,000 0.0%* 4.0%
5 NSW Maryland 2287 $715,000 0.3% 3.9%
6 NSW Watanobbi 2259 $715,000 0.9% 3.9%
7 NSW Hawks Nest 2324 $710,000 0.8% 3.8%
8 NSW Cardiff South 2285 $740,000 1.2% 3.8%
9 NSW Mount Hutton 2290 $755,000 1.3% 3.8%
10 NSW Blue Haven 2262 $750,000 0.2% 3.7%

Source: Well Money.

~~

Before making any investment decisions, please do your own independent research, taking into account your own situation. This article does not purport to provide financial or investment advice. See our Terms of Use.



You May Also Like

Australian building costs have continued to soar, but has your insurance cover kept pace?

MCG Quantity Surveyors analysis found underinsurance could cost homeowners over $100K to replace a property, with the issue even more profound in the commercial property sector.

When will Australian property prices fall? One major challenge continues to prop prices up

Property prices are up by over 35% across the country since Covid, and while not the same story in each city, that’s little solace to prospective buyers pulling their hair out.

A window of opportunity could be open for savvy Australian property investors, but time is ticking

One expert has noticed investors are on the move while there’s less competition and fewer buyers in the marketplace.

Why Aussie property buyers aren’t waiting for rate cuts anymore

A surge in home loans shows buyers aren’t waiting for interest rates to drop before taking the plunge.