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Rentvesting: The Millennial Strategy Turning the Property Market on Its Head

In an era of sky-high property prices and shifting lifestyle priorities, young Australians are doing things differently. Enter rentvesting — a property strategy that's rewriting the rules of homeownership.


Instead of buying where they want to live, millennials are renting in lifestyle-rich suburbs they love and investing in high-performing areas they can afford. It’s smart, strategic, and it’s shaking up the property market in a big way.


What is Rentvesting?


Rentvesting is when you rent your primary residence and purchase an investment property elsewhere — usually in a more affordable or higher-yielding location.

It’s a strategy that says:

“I don’t need to own where I live — I just need to own somewhere that grows.”

Why Are Millennials Choosing to Rentvest?


1. Affordability

With median house prices in Sydney topping $1.6 million, buying in your dream suburb often means massive debt — or missing out altogether. Rentvesting keeps your lifestyle intact while building wealth in the background.


2. Lifestyle Flexibility

Millennials value freedom: the ability to move suburbs, travel, or change jobs. Renting keeps that door open, while still letting you step onto the property ladder.


3. Better Returns

Investing in regional growth areas like Toowoomba, Ballarat or Maitland — where prices are lower and yields are higher — can mean better cashflow and higher long-term growth.


4. Tax Benefits

Investment properties can unlock deductions for interest, depreciation, and expenses. That’s not possible with your own home.


Does Rentvesting Work?


Yes — when done well.

Take a Brisbane couple who rents in Paddington for lifestyle, but buys a dual key in North Tamworth for $650,000 with a 5.5% yield. Their rental income covers the mortgage, they get tax benefits, and the property’s growing in value.

They’re living where they love, and investing where it makes sense.

IFS Mentor clients Steve and Melissa rent a townhouse in Newcastle but bought a duplex in Wagga Wagga with a 5.8% yield. With strong rental income and smart structuring, their investment is cashflow positive and growing — all while they enjoy a bigger city lifestyle.

The Risks of Rentvesting


  • No First Home Buyer Perks: Rentvesters typically forgo grants and stamp duty concessions.

  • Lifestyle Overload: Some rentvesters live in high-cost rental areas, blowing the savings.

  • Poor Property Choice: Buying in the wrong location or chasing too much yield can backfire.


This is why working with a strategic property mentor — who understands cashflow, capital growth, and finance — is critical.


Rentvesting vs. Traditional Home Ownership

Feature

Rentvesting

Traditional Buying

Live in dream suburb

✅ Yes (as a renter)

❌ Only if affordable

Capital growth potential

✅ If buying in a growth market

✅ Dependent on suburb

Flexibility

✅ High

❌ Limited by mortgage/location

Tax benefits

✅ Yes (as investor)

❌ None on owner-occupied home

Rentvesting FAQs


Q: Can I rentvest and still access First Home Buyer benefits later?A: In some cases, yes — as long as you don’t live in the investment property or claim it as your principal residence.

Q: What if the investment property is negatively geared?A: Negative gearing can reduce your tax, but we’ll help you ensure the property still fits into your long-term growth and cashflow plan.

Q: Can I use equity from my rentvestment to buy again?A: Absolutely. Many clients use their first rentvestment to fund a second or third — it’s a stepping stone to a full portfolio.


Is Rentvesting Right for You?


Ask yourself:


  • Do I want to live in a suburb I can’t afford to buy in?

  • Am I open to investing in regional or growth areas?

  • Do I have a long-term plan for building wealth?


If the answer is yes, rentvesting could be your foot in the door.


How IFS Mentor Helps


At IFS Mentor, we specialise in helping Australians think beyond the traditional path. We use a framework that considers:


  • Long-term cashflow planning

  • Suburb selection based on data and growth

  • Finance structures to maximise leverage and reduce risk


With over 25 years of experience in property, finance, and strategy, we’ll help you rentvest with confidence — and build a portfolio that grows with you.


📩 Ready to Start Rentvesting?


Want to know Australia’s top 5 rentvesting suburbs right now? To book a one-on-one session with Peter click here!


Let’s turn your lifestyle goals into a smart investment strategy.

 
 
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