What is Rentvesting?

Rentvesting is a home-owning strategy where you rent a property to live in that’s right for your lifestyle, while you buy an investment property that’s right for your budget. This may mean investing in another State that provides affordability.

Rentvesting allows buyers to get into the property market a lot earlier, delivering substantial capital gains and providing a home deposit in your preferred location in the future or ability to grow a property portfolio.

Rentvesting Pros and Cons

Pros:

Lifestyle?– live where you want and not limited to where you can afford to buy.

Gives you cashflow?– investors receive rental income from tenants which shrink the mortgage repayments.

Tax benefits?– certain investment property expenses can be claimed as tax deductions. These include the interest charged for loans, rental costs like insurance and advertising to name a few, which makes owning an investment property a lot easier.

There’s also negative gearing to consider. If you make a loss on your property, your overall taxable income can be reduced.?

Speak to an accountant for advice on this.

Potential capital gains?– If your investment property increases in value, you could sell it at a profit in the future or use equity to buy another property. Any gain made on the sale of an investment property will also be subject to capital gains tax.

Cons:

Less control?– When you are a renter, you are subject to landlords potentially telling you that you have to leave the property for whatever reason. Ultimately landlords own the home and have complete control over it.

Risk?– All investments come with a risk they could decrease in value. Working with Sound Property? as the trusted investment property professionals is one of the best and easiest ways to reduce this risk.

In conclusion, the best choice for you will depend on where you are in life or what you want to achieve.?With the right guidance, you may be on your way to living the life you want now, while planning for a secure future.?

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