Rentvesting has become a lifeline for young adults looking to enter Australia’s property market in 2026. With skyrocketing prices in capital cities and limited deposits, many are choosing to rent where they want to live while buying an investment property in a more affordable area.
This strategy allows them to potentially build equity, access capital growth and maintain lifestyle flexibility – even if it means missing out on some First Home Owner (FHO) incentives.
Why rentvesting is gaining popularity
Young adults are increasingly priced out of buying in their preferred suburbs, especially in cities like Sydney and Melbourne, where property prices often exceed $1 million.
Rentvesting lets them live close to work, friends or lifestyle amenities while investing in a property that offers strong growth and rental income.
PROs OF RENTVESTING
Lifestyle flexibility
Rentvestors can rent in their dream location – inner city, beachside or near work, without being tied to the location of their investment property.
Earlier entry to the market
Buying in a more affordable area means entering the property market sooner, often years before they could afford a home in their preferred suburb.
Capital growth potential
Investment properties in growth suburbs or regional areas can deliver strong capital appreciation, building equity faster than waiting to buy a home outright.
Tax benefits
Rentvestors may claim deductions for interest repayments, property management fees and depreciation, reducing their taxable income.
Note:
If you turn your home into a residential rental property on or after 1 July 2017, or purchase a second hand property after this date, you can’t claim a deduction for the decline in value for depreciating assets that were in your home. You can only claim a deduction for the decline in value for any new depreciating assets that you purchase for your residential rental property.
Portfolio building
The strategy enables the accumulation of multiple properties over time, setting the foundation for future financial gain and home ownership.
CONs OF RENTVESTING
No FHO incentives
Rentvestors typically miss out on grants, stamp duty concessions and other FHO schemes, as these are usually only available for owner occupiers.
Ongoing rent payments
Rentvestors must continue paying rent on their lifestyle property, that can add to overall costs and reduce cash flow.
Separate maintenance and expenses
Investment properties come with their own costs: maintenance, repairs and vacancies that can eat into profits.
Emotional attachment
Some may find it harder to build a sense of home when renting.
Is it worth it?
While rentvestors miss out on some FHO benefits, the potential for capital growth and earlier market entry often outweighs the loss of incentives.
For many young adults, rentvesting is the only realistic way to start building equity in property while maintaining the lifestyle they want.
Reach out to the office for a chat about your options as a firsthome buyer or rentvestor.
We’d love to help you jump on to the property ladder.
Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product.
