Finding it difficult to get your foot on the property ladder?
- Why not try rentvesting?
In the “old days” people would save for many years to buy their own home in the location they desired while renting in a less than desirable location so they could save a deposit.
And in the process, watching the property market slip further out of their reach as the price of housing increased.
With rentvesting, you can have the best of both worlds!
Rentvesting allows you to:
Typically the investment property will be purchased with a lower budget than the dream home. Though at a lesser price, the investment property can still potentially be cash-flow positive (putting money into your pockets each week). It could also have a short-term potential of increased equity to release towards the dream home.
Reduce the costs of owning a property with tax deductions
Our current tax system provides an excellent reward for investors. The various tax deductions on the investment property, tax benefits on the maintenance costs, and the ability to claim tax deductions on the interest payments of the investment loan all help offset the holding costs. All of which would not be possible if residing in your own home. The Australian Tax Office provides up-to-date information on claimable rental expenses
Avoid emotional buying
Purchasing a residential home is an emotional decision, and based on the individual/ families needs and wants.
Often a premium is paid for the “right” residential property, however Investment property should be purely numbers-based.
These numbers should be based on the return you will immediately receive, and the monetary return anticipated in the future, and both calculated together to ascertain if they fit with your own personal circumstances.
If paying a “premium”, for example buying above valuation because you like the colour-scheme and layout of the house; usually the immediate return is diminished. Rentvesting gives the freedom to purchase a property determined on facts, not emotions.
Buy for the best return of your money
Rentvesting allows you to choose to buy for the best return of your money.
It provides the opportunity to purchase in a well-researched area, with correct market timing, and as this is only an investment to get you on the first step to your dream home, you can get into the property market sooner and with a smaller deposit.
Rentvesting gives the freedom to purchase a property in a different city, or a suburb with current or coming infrastructure, schools, shops and green space other than you wish to live
Ideally, your investment property will be paying for itself, – and as long as the loan is structured correctly, the lender, tenant, and taxman should cover your investment with no out of pocket expense to you.
By rentvesting, and with thorough research and independent advice, you could be generating wealth for you and your family’s future, and beginning on your property portfolio and financial goals.