Ep. 264: The Ultimate Guide to Rentvesting – How to Unlock Property Potential in High-Cost Cities to Create Your Ideal Lifestyle
Ep. 264: The Ultimate Guide to Rentvesting – How to Unlock Property Potential in High-Cost Cities to Create Your Ideal Lifestyle
2.05 – Cate ponders how The Trio have clocked up over five years, but they haven’t covered RENTVESTING yet!
10.21 – Cate explains why rentvesting is more affordable in capital cities, particularly Sydney and Melbourne
17.30 – Dave shares a real-time example of a Melbourne couple rentvesting in a blue-chip suburb
22.18 – Next week’s teaser… What to tackle at tax time!
27.04 – Why is it so difficult to get into highly sought-after locations? And why isn’t rentvesting considered more often?
39.27 – Gold Nuggets
Rentvesting is not for everyone, but many people do not even consider it, which may be to the detriment of their finances or lifestyle.
Maintaining an open mind to rentvesting and exploring it’s potential will provide you with greater clarity on your pathway forward, whether you take that path or cross it off as an option.
Dave explains what rentvesting is, and why it’s becoming a popular strategy among first-time buyers. From desireable rental locations to growing wealth, there are plenty of reasons why some choose to adopt this strategy.
Mike touches on the key benefits and he highlights his own rentvesting benefits that he’s currently experiencing.
Cate covers off some of the reasons why rentvesting is more affordable in capital cities, particularly the lower-rental-yielding cities such as Melbourne and Sydney.
Dave shares a real-time example in Melbourne’s leafy Hawthorn East. He contrasts a mortgage versus a rental property for a make-believe couple and the cashflow differentials are quite a surprise! For a first home buyer versus a renter, the difference in monthly cost is more than three times.
Was buying always this difficult? Cate dares to ask the question and Dave steps our listeners through the last forty years. But Cate sheds light on the cost of property on the opposite side of town. How do these locations compare, and what is the multiple of the average annual wage these days?
Mike explains why it’s so difficult to get into highly sought-after locations, but he also explains why the number of rentvestors is so limited. And there are quite a few reasons!
But how short a tenure is too short for a rentvestor? Tune in to find out….
…. and our gold nuggets!
Dave Johnston’s gold nugget: Carefully consider your own personal situation and goals. Rentvesting can be great, but it’s not for everyone. It only makes sense that your property decisions should be informed by your over-arching property strategy. And how will your next purchase impact your future purchases? This is a very important question.
Mike Mortlock’s gold nugget: Mike uses a car analogy. Selecting the right car for the right track is critical. “Asking the place where you want to live to be the investment as well, is sub-optimal for property success.”
Cate Bakos’s gold nugget: Cate reminisces about a successful real life client scenario that was based on a well-carved out strategy.
Resources:
We have some articles and blogs relating to this episode below.
https://www.mpamag.com/au/news/general/rentvesting-to-gain-popularity-experts-say/435308
If you’ve enjoyed this show, you may enjoy these episodes:
Ep. 29 – Congenial negotiation tactics and how to apply them in the right situation
Ep. 30 – Money Management – 7 steps to success
Ep. 33 – Starting without a plan and end goal – No.3 of the top 7 Critical Mistakes
Ep. 95 – Security guarantees, co-borrowing, gifts and more – Helping your kids buy their first property
Ep. 181 – First Home vs Forever Home; Dream Home vs Investment – What are the trade-offs and key considerations?