In Perth’s current property market, it’s often not until their third homes that buyers secure their forever home. That’s where rentvesting comes in. As featured in The West Australian, Realmark’s resident Buyer’s Advocate, Ang Mcgrath, provides valuable insights into rentvesting within the Perth market.
What Is Rentvesting?
Simply put, it’s the practice of purchasing an investment property and renting it out, while renting a separate home to live in.
But more than that, rentvesting involves challenging the way buyers approach their long-term property strategy. It fast tracks the journey to their dream home, often allowing buyers to remain in the areas they’ve built their lives around. The rental income can aid in increased borrowing power and cover mortgage repayments, potentially easing the cost of home ownership. You’ll also enjoy the benefits of building long term capital growth and equity over time.
The Importance of Choosing the Right Property
Navigating the property market can be tricky and property hunting is stressful and time-consuming. Choosing the wrong property can set you back financially. While there is a fee involved, the value of having a buyers advocate in your corner is huge, especially in Perth’s competitive market. A local expert knows exactly what to investigate, from zoning changes and heritage listings to crime rates and upcoming infrastructure projects. Choosing the right property in the right area with strong growth drivers that will potentially outperform the market cycles, is key to property investing.
The Key to a Successful Rentvesting Strategy
With the rental market at crisis levels, we need more investors purchasing properties to increase the supply of affordable rental options. This not only helps renters, but also strengthens the overall property market. The current conditions and trends have supported increased rental returns and price growth.
However, just as with any investment, there are risks and costs that need to be considered. Handling issues like property damage or disputes could lead to costly legal fees and proceedings. Choosing a professional property management team that regularly inspects the property and knows the details of insurance, compliance and tenant relationship . It’s not just about property price or rental income, but rather rentvesting is about identifying the right combination of investment yield, security, capital growth and asset protection.
Why Rentvesting Works in Perth’s Market
Perth and some regional markets present a unique opportunity for rentvestors due to:
- Affordable entry points in emerging suburbs.
- Strong rental demand, supporting consistent rental returns.
- Capital growth potential in well-located investment properties.
With rental income contributing to mortgage repayments, rentvesting helps buyers enhance their borrowing power and offset the costs of property ownership. Over time, it also builds equity and capital gains, which can later be leveraged to purchase an owner-occupied forever home.
By employing expert advice, to buy and manage, and selecting properties with strong growth drivers, you can potentially reduce reliance on market conditions when it comes time to sell your investment property. We also recommend speaking to financial planners, accountants and mortgage brokers to ensure that you have all the information you need as well as advice specific to your circumstances and aspirations.
Realmark's Angela McGrath has noticed that revesting appeals to a wide variety of investors "Over the past year, conversations with buyers have evolved. With Perth’s rising property market and solid rental returns the opportunity to think outside the box is real for a lot of investors and home buyers. I have worked with a variety of buyers, including first homebuyers, recent permanent residents who have spent the last few years building their lives in Australia and a single mum who after an expensive divorce, thought re-entering the market was out of reach but was determined to stay in her community."
The bottom line when it comes to property investing? Do your research, and have the right team of experts by your side.
Realmark offers trusted guidance in identifying properties from Ang Mcgrath and experienc from our property management experts – reach out today.
The above advice is general in nature and relates to property services. It is not intended to constitute financial planning or financial advice. Please seek advice specific to your individual circumstances.