Rentvesting is the term used to describe investors that rent in the location they love but can’t afford to buy in…..so they purchase a property they can afford in a different area which meets their investment goals.
Most people want to live in locations that are close to the amenities that they love and suits their current lifestyle. For example, you may want to live close to the city centre where you can access lots of cafes, entertainment venues, parks (that someone else has to maintain!) and transport so you don’t have to own a car. But these locations are often higher priced (due to demand), and increasing in value consistently. The cost to buy a property in that area may currently be out of your reach; so to be able to live in the area it may be better to rent there instead.
In fact you could say I’m rentvesting right now- we’re renting properties in Europe during our travels while our investment properties in Australia are doing their wonderful wealth creation thing! It’s a wonderful thing to know that my husband and I have the freedom to travel the world while earning an income and seeing our investments grow in value.
So how do you choose where to invest?
A number of factors will dictate where you should buy, including:
- Your budget
- Your investment goals
- Your property strategy
- Your knowledge of the market
- Your level of acceptable risk and
- Your ability to target investment grade locations
It’s important that whatever you buy meets the criteria for being of investment grade – particularly as a rentvestor, you don’t want to choose a lemon.
And of course, the first thing to get right is the location. Ideally you should buy in an investment grade location that you can afford – which may mean looking beyond your own backyard. It can feel overwhelming to attempt to buy property in another state, but the rewards can be great. With the right skills and tools it can prove to be much more rewarding than buying in your local area.
Once you know the location that best suits your needs then the focus is on finding the right property. Considering less than about 3% of properties for sale are what we consider to be investment grade, it can be a challenge to find them, but again, with the right skills and tools finding the best ones is achievable.
If you want to learn more about property investing and buying better property, then enter your details below to download our Property Investors Guide.
Yours in property,
Linda
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