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The Investment Property Place

The Investment Property Place

Independant property experts working for you, not the developer

The Rentvesting Strategy; How You Can Live In Your Dream Property NOW

A Rentvesting strategy could provide an opportunity for you to live in your dream home by using the tax benefits and leverage from your own investment property.

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!

Paper houses made from money

Rentvesting allows you to:

  • Reduce the costs of owning a property with tax deductions
  • Claim interest payments on your tax return
  • Watch your property value grow now
  • Buy for the best return on your money
  • Avoid emotional buying

Many buyers find Rentvesting appealing as they can get on that property ladder sooner, with a lower deposit, - and still live in the house of their dreams.

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

Further benefits

  • - Live the lifestyle you wish to lead by renting without compromising on location, or an over-extended mortgage commitment.
  • - As you will not be tied into one location when you are renting, there is flexibility to down-size, upgrade, or sea-change as life progresses.
  • - If you do decide to move, there are no stamp duties, solicitor fees or other legal costs to worry about, as long as your lease agreement is complete.

Result

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.

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