A large percentage of our younger landlords in their 20’s and 30’s and are "Rentvesting”- which means they have bought investment properties whilst they continue to rent, in order to get a foothold into the property market.
Even in a falling market, housing affordability is still an issue, especially for Generation Y.
Also the trend toward casualisation in jobs and the workforce is not conducive, to obtaining a 25-30 year mortgage.
The taxation benefits for our rentvesting landlords are numerous, as they can virtually deduct all the outgoings for their investment properties on their tax returns.
Rentvesting has not only helped some of our landlords get into the market sooner, but has also allowed them to choose a financial structure that allowed for a smaller deposit.
RealRenta Landlord Robert has chosen an investment property in his budget, without any constraints in the location.
" I wanted to get a high-yielding property in a high-growth area, so that I could build a nest-egg for when I marry my fiancée and we are ready to buy a home to live in”.
But what about the current market and future trends?
Rentvesting does carry risk, especially in a cooling market and the risk of rising interest rates.
Changes in negative gearing policy will also make rentvesting a less attractive alternative,
Luckily, RealRenta Landlords that are using this strategy are far better placed than other property investors, as they have complete control over their rental income and are not paying thousands of unnecessary dollars to property managers.
You can use RealRenta for Free for up 2 months, so that you can see how easily it automates the whole management process for you AND costs less than a quarter of what property managers charge.
It is hard for property managers to justify their exorbitant fees, when a platform like RealRenta does everything they do.
Also, if you would like to speak to a lending specialist from our trusted finance partner about how to structure your loans for rentvesting, contact propertyloans@realrenta.com .
Marlene Liontis
Saturday, 10 November 2018
