IS RENTVESTING
A GOOD IDEA?

A guide to rentvesting strategy for investors

Is Rentvesting A Good Idea?

Rentvesting is a growing trend in Australia, where individuals purchase an investment property to generate rental income while continuing to rent their primary residence.

This strategy offers the benefits of owning real estate, without the commitment of living in it. As property prices continue to rise, rentvesting is becoming a popular option for those looking to build long-term wealth and financial security.

Is rentvesting a good idea? This service page provides a comprehensive guide to understanding rentvesting and how it can be utilised to meet your financial goals.

What is Rentvesting and How
Does it Work?

So first off, what does rentvesting mean?

Rentvest is a portmanteau of the words rent and invest. It is a real estate investment strategy where individuals choose to rent the property they live in and purchase investment properties elsewhere to generate rental income.

This approach allows them to benefit from property ownership — without the burden of a large mortgage or the responsibilities that come with maintaining a property.

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Pros and Cons of Rentvesting

Benefits of Rentvesting

Getting a renvestment (rent + investment) is becoming a wildly popular practice, especially for millenial property investors for a number of reasons:

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Affordability

Urban areas usually have high property prices that makes it difficult for many people to afford to buy a property outright. Rentvesting lets people enter the property market and start building wealth through investments, without sacrificing their current standard of living.

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Location Flexibility

Rent vesting gives people the opportunity to live in areas where they might not otherwise be able to afford to buy, while investing in areas with better rental returns or capital growth prospects.

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Diversification

By investing in a portfolio of properties, rentvestors can spread their risk and potentially reduce their exposure to market downturns in any one particular location.

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Tax Benefits

Rent investing can provide tax benefits, such as deductions for rental property expenses, which can help to boost the return on investment.

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Lifestyle Choice

Rentvesting allows them to live in the here and now, while also working towards a longer-term financial goal of building wealth through property investments.

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Passive Income

Rentvestors can generate passive income from their investment properties, which can help to supplement their regular income.

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Build Equity

Perhaps the biggest pro of rentvesting is the buildup of equity you have in your property. You can use the equity to refinance, buy a new car or even another property, and more!

Risks of Rentvesting

However, like most things, rentvesting also has cons. It comes with its challenges and risks like:

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Higher Ongoing Costs

Rentvesting can come with higher ongoing costs, such as property management fees, maintenance costs, and insurance.

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Market Risk

Like any investment, rental properties are subject to market risk, and the value of your investment can go up or down depending on market conditions.

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Difficulty in Estimating Returns

It can be difficult to estimate the return on investment for rental properties, as rental income and property values can fluctuate over time.

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Management Responsibilities

Rentvestors are responsible for managing their investment properties, which can be time-consuming and require a significant amount of effort.

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Lack of Stability

Renting the property where you live can lead to a lack of stability, as you may have to move if the landlord decides to sell the property or increase the rent.

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Increased Debt

By investing in rental properties, you may increase your overall debt levels, which can impact your ability to make additional investments in the future.

To summarise, below is a table of rentvesting pros and cons to help you weigh your options

PROS

  • Affordability
  • Location flexibility
  • Diversification
  • Tax benefits
  • Lifestyle choice
  • Passive income
  • Build equity

CONS

  • Higher ongoing costs
  • Market risk
  • Difficulty in estimating returns
  • Management responsibilities
  • Lack of stability
  • Increased debt

How To Get Started in
Rentvesting

So is rentvesting a good idea? Yes, but only if the conditions and your personal circumstances are ripe for such a huge financial commitment. In truth, whether or not rentvesting is a good idea depends on a variety of factors, including an individual’s financial situation, investment goals, and risk tolerance.

Here are some of the things you can do to get started with rentvesting:

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Assess your financial situation

Before you get started with rentvesting, it’s important to assess your financial situation, including your income, expenses, debt, and savings. This will help you to determine if rentvesting is a suitable investment strategy for you and to set realistic investment goals.

Create a budget

Create a budget that includes the costs of rentvesting, such as property management fees, maintenance costs, and insurance. This will help you to understand the ongoing costs of ownership and determine if you have enough disposable income to support your investment goals.

Seek professional advice

Consider seeking the advice of a financial professional, such as a financial planner or mortgage broker — like us! We can help you to understand the potential risks and benefits of rentvesting and provide you with guidance on how to get started.

Research the property market

Research the property market to determine which areas offer the best rental yields and capital growth potential. Look for properties that are located in areas with strong rental demand, low vacancy rates, and potential for future growth.

Determine your investment goals

Determine your investment goals, such as the type of property you want to invest in, the expected rental yield, and the expected capital growth. This will help you to make informed investment decisions and to choose properties that are in line with your investment goals.

Secure financing

Once you have found a suitable investment property, make an offer and purchase the property. Consider using a property management company to manage the property on your behalf, as this can help to reduce your workload and increase your return on investment.

Purchase the property

Secure financing for your investment properties, such as a mortgage. Consider using an interest-only loan, which can help you to maximize your rental income and reduce your costs.

Frequently Asked Questions About Rentvesting

  • Yes, you can rentvest as a first time home buyer. However, it’s important to understand that rentvesting requires a significant amount of capital to purchase a rental property, and it may not be feasible for everyone. Additionally, it’s important to consider the ongoing costs of ownership, such as property management fees and maintenance costs, before making a decision.

Reviews for ZEP Finance

  • Second to none

    Over many years and many transactions, Zain Peart and his team (Kylie, thank you) have always been great, but this time they went above and beyond. Our situation is complex, the investment property transaction we just executed was complex, and what was even more complex was the timing of the transaction (floods, COVID-19, interest rate increases, maternity leave, personal matters etc). ZEP provided much needed stability in these uncertain times. There is nothing that office cannot do, and it seems the more complex the scenario the more they stand out. I cannot recommend ZEP highly enough, and do to my family, friends and clients 100% of the time.

    Second to none
    NL Daley
    New Purch
  • Second to none

    Over many years and many transactions, Zain Peart and his team (Kylie, thank you) have always been great, but this time they went above and beyond. Our situation is complex, the investment property transaction we just executed was complex, and what was even more complex was the timing of the transaction (floods, COVID-19, interest rate increases, maternity leave, personal matters etc). ZEP provided much needed stability in these uncertain times. There is nothing that office cannot do, and it seems the more complex the scenario the more they stand out. I cannot recommend ZEP highly enough, and do to my family, friends and clients 100% of the time.

    Second to none
    NL Daley
    New Purch
  • Second to none

    Over many years and many transactions, Zain Peart and his team (Kylie, thank you) have always been great, but this time they went above and beyond. Our situation is complex, the investment property transaction we just executed was complex, and what was even more complex was the timing of the transaction (floods, COVID-19, interest rate increases, maternity leave, personal matters etc). ZEP provided much needed stability in these uncertain times. There is nothing that office cannot do, and it seems the more complex the scenario the more they stand out. I cannot recommend ZEP highly enough, and do to my family, friends and clients 100% of the time.

    Second to none
    NL Daley
    New Purch
Sorayah ZazuriSorayah Zazuri
04:08 14 Nov 23
Zain, Emma and the whole team at ZEP finance have done an amazing job. They successfully navigated us through our construction loan, and then onto refinancing to get us a better home loan with a reduced interest rate. We’ll done guys! You have taken a huge weight off of our shoulders. We look forward to dealing with your amazing, local, Lennox Head, family run business for any new mortgage needs!
Greg PowellGreg Powell
21:29 07 Nov 23
Zain and his team are friendly, efficient and professional. We have used ZEP’s services on a few occasions and I can not speak highly enough of them. They are patient and understanding and go above and beyond any expectations you may have. No hesitation in giving 5 stars plus…. Your emergency is their urgency. Fast and easy.
Shannon SayeShannon Saye
23:26 31 Oct 23
Highly recommend using ZEP Finance they made the process of getting finance easy and completed the process quickly and efficiently.
Charlotte MonlunCharlotte Monlun
03:34 10 Oct 23
Zain and the team at ZEP Finance came recommended when we started looking at buying near Lennox and needed financing. Zain was able to assist us in getting the best solution for our mortgage. The team was incredibly attentive, responsive with any queries we had along the way and professional. They made the process seem as seamless as can be considering the current lending context. A big thank you Zain, Trudy and Kelly for your expertise and support, we will certainly recommend your services.
Jamie HetheringtonJamie Hetherington
11:14 03 Oct 23
Couldn't be happier with the team at ZEP Finance. Can be quite overwhelming when making these life changes and they eased us through it all! Thank you so much
Sheridan VenessSheridan Veness
07:17 11 Sep 23
We just purchased our second home with Zain and his teams help and my goodness they are truly amazing ! They are quick and efficient and make the process stress free not to mention they are all so lovely and helpful with every need . Couldn’t recommend them enough!
Marnie SironenMarnie Sironen
06:45 01 Sep 23
Zain, Emma, Karina and the team were wonderful. They expertly navigated our complex situation, were endlessly patient and explained everything to us in plain English, which was really appreciated. Highly recommend.
SALT GYPSYSALT GYPSY
00:35 26 Aug 23
We were recommended Zep Finance by friends of ours. Zain, Emma and the team met and exceeded our expectations and we couldn’t recommend highly enough. This was our first home loan experience and their communication was always prompt and clearly explained which made the whole process as straightforward as possible for us. Thanks so much for your perseverance and dedication to finding a home loan solution for us guys, really appreciated!
Jade RogersJade Rogers
09:28 25 Aug 23
Brett WatsonBrett Watson
05:01 14 Aug 23
Kylie Harris from Zep helped me throughout the process and was amazing in my opinion, I have already recommended Zep to friends .
Micheal SimpsonMicheal Simpson
04:48 14 Aug 23
shelby milneshelby milne
05:33 10 Aug 23
ZEP finance was fast and efficient. The whole team are more than accommodating and very friendly! I would 100% recommend and be using them again in future.
Andro EngelbrechtAndro Engelbrecht
00:12 25 Jul 23
Fantastic service once again! We've used Zain and the team from ZEP Finance for our past mortgages and recently to extend our current home loan to get some renovations done. Zain and his team was excellent at communication and did everything in a timely manner. Highly recommend and will definitely use them again in the future.
Hong KHong K
13:03 05 Jul 23
Zep finance is truly amazing and will help you achieve the best result. As a first home buyer, I am not sure about the process but my broker Kylie and Karina have always been very helpful, always kept me informed throughout the process and went above and beyond to assist until it is all completed. It was an amazing experience I couldn’t have done it without ZEP Finance !!!
Louise HarrisLouise Harris
10:41 11 May 23
Zep finance seamlessly managed our recent refinancing and made the whole process so easy for us. The whole team are friendly, professional and very thorough. They were also amazing to deal with a few years ago when we were first home buyers navigating a construction loan. Highly recommend!
Thomas HarrisThomas Harris
04:30 10 May 23
Zain and the ZEP team helped us get our initial home loan in 2019 and have just assisted us with refinancing. Great team, happy to answer all questions and a smooth process. Would recommend to anyone, near and far - we work with team from Western Brisbane without any dramas!
Jean BarrJean Barr
10:40 19 Apr 23
Made it easy for me to get my house loan. The staff were all very professional and made the whole process much easier and smoother. I would never have been able to settle on my purchase so quickly had I not had the team behind me. Everything was clearly explained to me. They took the stress out of the whole process.
Pip CPip C
10:24 19 Apr 23
Zain and his team did a wonderful job securing me a home loan and helping me understand the steps involved. They communicated with all the necessary parties on my behalf and l couldn't have been happier with the work they did for me. I highly recommend ZEP finances. Many thanks Zain, Kylie, Lisa and all the team.From a happy first home owner!
Louise O'ConnellLouise O'Connell
08:32 30 Mar 23
Zep Finance are world class! This was my 6th mortgage and by far the best advice and all round service I've ever experienced. Kylie went above and beyond to find me the best deal, with Trudy, Emma, Jasmine and Caitlin keeping me informed along the way. Thanks ZEP! I really appreciate the great loan you negotiated.Highly recommend this team!
Demi KroehnertDemi Kroehnert
01:23 28 Jan 23
Amazing experience for first home purchaseZEP Finance we’re excellent in making our fist home buying experience simple. Our broker, Joel, provided an awesome experience when purchasing our very first home and wer were able to purchase the home of our dreams. Throughout the whole process, Joel always communicated with us clearly and answered any questions we had, making sure we understood. Thank you to Joel and ZEP finance for providing us with a great experience and we will be sure to return when we need a broker in the future.
Brad NewbyBrad Newby
22:20 27 Dec 22
The team at ZEP Finance were very professional throughout the whole loan process and provided us with several options that suited our circumstances. Not living local was not an issue for them and the communication provided from the ZEP team was amazing. If you are looking for a service which is tailored to your specific needs we highly recommend reaching out to Zain and his team. Thanks for helping us achieve another milestone in our lives.
So grateful for Zep Finance.There are few words that can explain our gratitute to Zain and Joel.The brokerage service was excellent from beginning to end in assisting us to secure our very first home.Zain and Joel made us feel valued and informed each and every step of the way on our journey to owning our own home.We can't thank them enough for their exceptional, meticulous, professional and efficent assistance and support.If you are looking for a broker, we can absolutely recommend Zep Finance and will continue to use their services in the future!From the Myburghs.
Abbey McBurneyAbbey McBurney
23:37 20 Oct 22
Third time - Still Amazing ServiceThis was our third time working with ZEP Finance. The whole team supported us through a very difficult process negotiating with our previous lender following the February/March floods. We would have been lost without their support.They then switched gears and sprung into action to get us locked and loaded to buy a new, flood free home.Joel helped us obtain pre-approval with our preferred lender and the whole process from exploring options to pre approval to settlement was seamless and stress free.Zain has built a quality and caring team, whose attention to detail and customer service is hands down second to none.I have always, and will continue to recommend ZEP to anyone looking into finance options.
The Image CollectiveThe Image Collective
05:22 04 Oct 22
Highly recommend the entire team at ZEP to anyone needing finance information or services. The results were nothing short of amazing. This experience for me has restored my reservations about loans/finance with their professionalism and knowledge. I understood everything that was explained, was given options and felt so empowered to leave my long term bank.I have since referred family and friends to see them and hope anyone reading this gives them a go. Trust me, you won't be disappointed. THANK YOU ZEP!!!
Nat DaleyNat Daley
00:18 02 Aug 22
Second to noneOver many years and many transactions, Zain Peart and his team (Kylie, thank you) have always been great, but this time they went above and beyond. Our situation is complex, the investment property transaction we just executed was complex, and what was even more complex was the timing of the transaction (floods, COVID-19, interest rate increases, maternity leave, personal matters etc). ZEP provided much needed stability in these uncertain times. There is nothing that office cannot do, and it seems the more complex the scenario the more they stand out. I cannot recommend ZEP highly enough, and do to my family, friends and clients 100% of the time.
Wan BradridgeWan Bradridge
10:06 11 Jul 22
Amazing service! Zain, Kylie and the team went above and beyond for us. They made the process so easy. They did all the hard part for us, we didn’t even have to lift a finger! Always keeping us up to date with the progress of the loan application, very professional and friendly. We would recommend the team to anyone! Thank you guys! Craig and Wan
J CJ C
10:03 11 Jul 22
I couldn't have asked for better service! Zain, Jasmine, Emma and the entire team at ZEP worked around the clock to find the best possible loan for my situation.If you're looking for a professional, timely, considerate and understanding broker, ZEP is my recommendation. Jasmine always replied to my requests quickly and efficiently and Zain worked tiressly to find the product just for me.
Sally CookSally Cook
10:02 17 May 22
PROFESSIONALSERVICE AND GREAT COMMUNICATION !!Zain, Joel and his team were extremely helpful, responsive and gave us excellent advice throughout the process of obtaining our loan and securing a home in this difficult property market. Their service was sincere and supportive and we would highly recommend to anyone to use their services. We will most definitely reach out to them once again for any further loan applications. These guys made it all happen !!! THANKS HEAPS
Helen WoodburnHelen Woodburn
00:55 15 Jan 22
Buying and selling property can be stressful so having someone assist us with our financing towards the selling and buying of a property was very important to us. Zain at ZEP Finance came highly recommended. Both Zain and his team did an incredible, efficient and professional job from start to finish. Zain's knowledge and experience is exceptional which instilled our confidence and trust. The team's communication was outstanding and their timely and prompt attention to detail provided comfort and peace of mind throughout the process. This meant we could focus on other necessities associated with moving house as well as saving us a heap of time. We would highly recommend Zain and ZEP Finance to anyone requiring a mortgage broker.
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