Rent-vestors on the rise

Highrise Apartments

At the start of each calendar and financial year there’s an influx of new property investors – some trying to “dodge” the taxman and others in search of New Year wealth creation.
 
Among that group is a growing number that don’t fit the traditional investor mould – the rent-vestor.
 
They’re a new breed of property investor (determined to realise their New Year’s resolutions sooner rather than later) who are all about maintaining a preferred lifestyle while doing the investment hard yards at the same time.
 
It’s the person who buys an affordable home to rent out while renting a better and more desirable home somewhere else, in a location they actually want to live themselves.
 
Many rent-vestors are younger Australians who can’t afford to buy where they want to live, whether that’s a desired style of home or location.
 
According to a recent Mortgage Choice Investor Survey it’s a trend that is on the rise.
 
The survey reported a jump in first homebuyer investors – from 21.1 per cent of all property investors in 2014 to 36.6 per cent in 2015.
 
The survey revealed one in four first-time buyers purchased an investment property before an owner-occupier property because it was “more affordable”.  
 
Their rationale?
  • 26.6 per cent said it was because they could more “easily afford it”;
  • 26.5 per cent said it allowed them to “get their foot onto the property ladder”; and
  • 18.9 per cent said it allowed them to “buy where they could afford but still live where they want”.
In some areas, where property prices are tracking up quickly, rent-vestors are only holding the properties for a couple of months before selling and using the profit to buy another property in a better situated locality.
 
The LJ Hooker The (new) Australian Dream white paper has also reported ‘Gen Y’ have adapted the way they buy, use and invest in property to suit the way they want to live – funding their current lifestyles by becoming investors, searching for positively geared properties to boost their regular income.
 
With the “rent-vestor strategy” on the rise, the savviest of the new breed of landlord are also making sure they protect their investments with the right insurances, including RentCover.
 
 
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