Most people in Australia grew up with the dream of owning their home in a place they could afford and then slog through their lives to pay off the debt to own their greatest dream. However, as house prices continue to rise, more and more first home buyers are finding it difficult to enter the property market, forcing them to rethink their property buying strategy.

Rentvesting is currently a hot topic on the media

Source: Sunrise (@sunriseon7) June 7,


“Very often, home buyers underestimate the costs of owning a home. These include the maintenance costs, the renovation costs and the interest paid over the life of the loan. Moreover, once you buy a home, you are tied to that location, which doesn’t help if you need to move around cities for your job. Often, when you add up all these things together, renting proves to be a far more convenient, and probably cheaper, option as compared to owning your home,” says Linda, a young architect, who rents an apartment with her husband in the posh Sydney suburb of Bondi while owning an investment property in Queensland.

“Buying a home in the suburb we currently rent in would have cost us at least a million. We could have moved to the outskirts, but we did not want to compromise on our lifestyle and social circle. So, we chose to buy where we could, and rent where we wanted to stay,” she adds cheerily.

Rentvesting your way into the property market

Gen Y, or Generation Rent, is more pragmatic when it comes to purchasing a property. However, don’t be misled into thinking that all of Gen Y has given up on the Australian dream of owning their abode. It is just that they are ready to wait longer and use a different means to that end.

It is true that rentvesting offers an alternate way for first home buyers to step into the property market. However, many still aim to live in the house they scrounged for, eventually. Renting for their entire lives is not an option many Australians are open to.

Considering the fact that the property prices, as well as the living costs, in Australia are on the rise, for an average couple, buying a home could mean stretching their finances to a level where they may not have much left to meet their other life goals. Further, it doesn’t make sense to buy your home unless you know you are going to stay there for a long term. If you need to change cities in the near future, the cost of selling your home and buying another could add on to your expenses, as there is no guarantee that you will sell in a particular period for profit.

(Sellers, to an extent, you could control how long your house stays on the market. Read more.)

Rent or Buy

Renters are often criticised for throwing away money on rental payments when their owner-occupier counterparts are building equity through mortgage repayments in the same period. However, this argument may fail in the face of high interest rate loans that ensure home owners are throwing away almost as much money in interest.

Amidst the speculation of rate hikes by the big banks in the future, there are several smaller reputed lenders in Australia that offer better rates, and even better customer service, for less. If you are paying more than 4% interest on your home loan, it may be time to refinance to a lower interest rate home loan. Compare broker pre-negotiated home loan deals here.

Further, as Linda puts it, she can call up her landlord for a leaking tap or any other complaint and leave the repairs to him. “That’s saving a lot of money and headache, which is not possible when you own a home and must pay for every repair and renovation that will be inevitable as the house ages,” quips Linda.
However, one must not forget that renters are often at the mercy of their landlords who could take as long as they like to make the repairs, increase the rentals every time the lease is renewed, if they please, and even ask the tenants to vacate if they want to.

A lifestyle choice

To rent or to buy or even rentvest is mainly a lifestyle choice, according to Susan, a mortgage broker at HashChing.

She explains that buying a home is a good choice if you intend to stay in that home for the life of the loan, gaining enough equity to make the purchase meaningful.

However, with Gen Y giving more importance to experiences than owning bricks and mortar, it is not uncommon for young home buyers to refinance their home loans midway and dip into the equity to take a vacation or buy a car, turning back the clock on their home loans. Additionally, when you are purchasing a home in your 20s or early 30s, you don’t really know if you are going to live in the same spot for the rest of your lives. Considering the current global landscape, most career-oriented youngsters move places often, making renting an ideal choice for them.

That being said, in addition to living where you want, it may be a wise decision to buy an investment property where you can. The rentals from the property could be put down towards your mortgage repayments, and you could also claim tax deductions for interest payments, repairs and depreciation on your investment property (Read more here). It makes sense to stow away any extra income to build the deposit for your own home.

Whether you choose to rent or buy, it is very important to research the market before making a decision. Especially when you are buying an investment property, you must consider factors that would appeal to the tenants. Family friendly location, vacancy rates, historical performance – get the latest numbers by ordering your free property report here. As a bonus, we have also compiled a guide to buying an investment property for starters.

Susan further adds that while renters could save more by shopping around for houses and negotiating the rental, home buyers and investors must compare home loans online to get the best home loan deals and save more money.

As APRA gets stricter with investment lending, investors could benefit by speaking to the expert mortgage brokers at HashChing who have access to exclusive home loan deals from over 60 lenders across Australia, updated weekly.

Get in touch by filling in the form below and we will put you in touch with an experienced mortgage broker in your area.


By Vidhu Bajaj
HashChing Content Writer



HashChing is helping Australians by providing access to pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.

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