The term ‘rentvestor’ has been a bi product of the booming Sydney and Melbourne property markets. Would be first home buyers have been priced out of the respective Sydney and Melbourne markets with 40% and 25% growth over the past three years respectively.
Though we are experiencing more and more motivated first time investors looking to invest further afield in the SE QLD markets, whilst continuing to rent. These rentvestors are using their hard earned deposits to gain a foot hold into the property investment market, and why not. It works!
A great example of rentvesting is below:
The client had $80,000 deposit saved up and quickly realised that their deposit would not be enough to invest in her desired area of Cronulla where the average 2 bedroom unit price is around $650,000.
But rather than throwing her hands up and saying ‘I give up’ this investor came to us to discuss the option of investing further afield in SE QLD.
The client is currently renting paying. $400pw and did not want to contribute anything further towards the mortgage repayments beyond the $80,000 deposit. Fast forward two months and that is exactly what she achieved. A five year old 4 bedroom brick home 40min from Brisbane CBD for $300,000 and yielding 6%.
The plan for her now is to continue renting for the next five years whilst her investment appreciates and does not cost her anything, in fact, makes her approximately $2000 in depreciation benefits. Fast forward five years and the an will be to utilise the new found equity as a larger deposit for her home in Southern Sydney.
It’s not a complicated equation, although it does take some foresight and courage to invest interstate.
The rewards are out there, it’s just a matter of taking the first step.