Let’s Talk About Rentvesting in Australia

By Deltos Finance on June 10, 2024

You might find the traditional path to homeownership challenging, especially with rising property prices in desirable areas. Plus, it usually takes an average Australian over five years to save for a home loan deposit for a median-priced residential property. Enter rentvesting—a strategic approach for getting a foot on the property ladder without compromising your lifestyle. Today, let’s explore what rentvesting is, how it works, and whether it’s the right real estate investment strategy for you.

What is rentvesting?

Rentvesting is a relatively new property investment strategy where you buy an investment property in an area you can afford while continuing to rent in a location that suits your lifestyle. With this approach, you can live where you want while building wealth through property investment in more affordable areas.

How is it different from nest vesting? Nestvesting is a similar concept but with a twist. Instead of renting elsewhere, nestvestors stay home with their parents while purchasing an investment property. They can maintain or lower their living expenses while gaining extra income through a property they have rented out. Nestvesting can be particularly advantageous for young Australians with a supportive home environment who want to start their wealth-building journey early.

How does rentvesting work?

Rentvesting involves purchasing a property in a growth area with strong rental yields while renting in a more desirable location. Here’s a scenario to illustrate how it works:

Matt wants to live in inner-city Sydney but finds the property prices prohibitive. He rents a place in Sydney for $1,750 monthly and buys an apartment in a Hobart suburb for $350,000, which he put up for rent. The rental income from his Hobart property helps cover his mortgage payments and monthly rent in Sydney, allowing him to invest in property without sacrificing his desired lifestyle. In the future, he can also leverage the equity in his Hobart property to buy another investment property.

So, is rentvesting worth it? Is it suitable for first-home buyers?

Rentvesting is a tactical approach to property investment, especially for those who find it challenging to buy in their preferred living areas. As they invest in promising areas with strong rental yields, rentvestors can hugely benefit from capital appreciation and rental income. Simply put, rentvesting is a smart way for more Australians to enter the property market sooner rather than later.

Rentvesting can be an excellent option for first-time homebuyers. It offers the flexibility to live in desirable locations while investing in more affordable areas. But it’s essential to consider the potential challenges, such as managing an investment property and the lack of capital gains tax exemptions for primary residences.

what is rentvesting

What are the risks and rewards of rentvesting?

Is rentvesting a good idea? Like any investment strategy, rentvesting comes with its risks and rewards. Here’s a quick rundown to help you decide whether it’s the right path for you:


  • Flexibility: Live where you want while investing in affordable areas.
  • Wealth Building: Benefit from capital growth and rental income.
  • Tax Benefits: Claim tax deductions on investment property expenses.


  • Market Fluctuations: Property values and rental yields can fluctuate.
  • Property Management Challenges: Being a landlord comes with responsibilities and potential issues. It can be extra challenging when your investment property is miles away from where you’re living. 
  • No CGT Exemption: Investment properties may not be qualified for capital gains tax exemptions available to primary residences.

How can investment loans help you rentvest?

Do you like your odds with rentvesting? You can start with investment loans.

Investment home loans are tailored for property investors and can offer features like interest-only repayments, which can help manage cash flow. These loans often come with competitive interest rates and flexible terms to help you finance your investment property while renting elsewhere. Talking to a local mortgage broker can help you find the best investment loan options to suit your rentvesting strategy.

Where should you rentvest?

In 2024, rentvestors and nestvesters are looking at growth areas with strong rental yields and potential for capital appreciation. Popular locations include regional areas and outer suburbs of major cities like Brisbane, Hobart, and Adelaide. These areas offer more affordable entry points and promising long-term growth prospects.

If you’re eyeing Hobart or suburbs in Tasmania, check out our blog ‘Best Suburbs in Tasmania to Invest in 2024’ for more tips on where you can rentvest successfully. 

Final thoughts

Rentvesting and nestvesting are innovative strategies for allowing you to enter the property market without letting you compromise many things, including your lifestyle. But the important thing is to understand how these approaches work and weigh the risks & rewards to make informed decisions that align with your financial goals. 

Whether you’re a first-time homebuyer or looking to build your investment portfolio, rentvesting is worth considering. If you want to learn more about this real estate investment strategy, don’t hesitate to give us a ring. We’re ready to answer your questions and help you explore all your available options in property investing. 

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