Rentvesting is becoming increasingly popular with first home buyers given that many can't afford to buy in the areas they wish to live.
Rentvesters are those that own properties in areas they can afford - which they rent out to tenants - while renting themselves in the suburb they wish to live.
Wells Home Loans CEO Scott Spencer said it is hard to enter the market if you’re a first home buyer in Sydney and Melbourne.
“I feel for first home buyers in Sydney and Melbourne, because it’s really hard to buy a house close to the CBD,” he said.
“That means having to choose between buying an inner-ring or middle-ring unit – which might not suit someone who is planning to start a family – or buying a house on the city fringes – which can be hard if you have to commute to the CBD every day.
Mr Spencer said rentvesting is an option some first home buyers might not have considered.
"At some point in the future, you might be able to use the equity from your investment property to buy the house you always wanted in Sydney or Melbourne," he said.
“That said, rentvesting isn’t for everyone, because deciding where to live and buy is as much of an emotional decision as it is a financial one.
"So first home buyers should weigh up both those factors when deciding whether to follow the traditional owner-occupier path or choose the increasingly popular rentvesting option.”
The report identified suburbs where upwards pressure is being placed on weekly rents and property prices, vacancy rates are below 1.5%, yields are above 3.5% and inventory levels are below 5 months.
Suburbs to target as a rentvester with a budget of $500k to $600k.
|
Rank |
State |
Suburb |
Postcode |
Median sale price for houses |
Vacancy rate for houses |
Median yield price for houses |
|
1 |
WA |
Darling Downs |
6122 |
$506,000 |
0.0%* |
5.7% |
|
2 |
QLD |
Nambour |
4560 |
$585,000 |
0.5% |
4.4% |
|
3 |
TAS |
Sorell |
7172 |
$561,000 |
0.9% |
4.4% |
|
4 |
TAS |
Mornington |
7018 |
$571,000 |
1.0% |
4.3% |
|
5 |
TAS |
Oakdowns |
7019 |
$595,000 |
0.0%* |
4.1% |
|
6 |
TAS |
Brighton |
7030 |
$580,000 |
0.6% |
4.0% |
|
7 |
NSW |
Goulburn |
2580 |
$529,750 |
0.7% |
4.0% |
|
8 |
NSW |
Cringila |
2502 |
$595,000 |
1.1% |
4.0% |
|
9 |
QLD |
Kippa-Ring |
4021 |
$580,000 |
0.4% |
3.9% |
|
10 |
TAS |
Bagdad |
7030 |
$585,000 |
0.0%* |
3.8% |
Source: Well Home Loans
Suburbs to target as a rentvester with a budget of $600k to $700k.
|
Rank |
State |
Suburb |
Postcode |
Median sale price for houses |
Vacancy rate for houses |
Median yield price for houses |
|
1 |
QLD |
Coombabah |
4216 |
$660,000 |
0.3% |
4.3% |
|
2 |
TAS |
Midway Point |
7171 |
$609,000 |
0.0%* |
4.3% |
|
3 |
QLD |
Meridan Plains |
4551 |
$672,500 |
0.7% |
4.3% |
|
4 |
QLD |
Caloundra West |
4551 |
$677,000 |
0.9% |
4.2% |
|
5 |
QLD |
Lower Beechmont |
4211 |
$630,000 |
0.0%* |
4.1% |
|
6 |
TAS |
South Arm |
7022 |
$642,000 |
0.0%* |
4.0% |
|
7 |
NSW |
Edgeworth |
2285 |
$650,000 |
0.8% |
3.9% |
|
8 |
NSW |
Koonawarra |
2530 |
$625,000 |
0.7% |
3.9% |
|
9 |
QLD |
Rothwell |
4022 |
$600,000 |
0.2% |
3.9% |
|
10 |
TAS |
Warrane |
7018 |
$600,000 |
0.0%* |
3.9% |
Source: Well Home Loans
Suburbs to target as a rentvester with a budget of $700k to $800k.
|
Rank |
State |
Suburb |
Postcode |
Median sale price for houses |
Vacancy rate for houses |
Median yield price for houses |
|
1 |
QLD |
Highland Park |
4211 |
$787,000 |
0.3% |
4.4% |
|
2 |
QLD |
Merrimac |
4226 |
$770,000 |
0.1% |
4.3% |
|
3 |
QLD |
Little Mountain |
4551 |
$780,000 |
0.2% |
4.1% |
|
4 |
QLD |
Forest Glen |
4556 |
$794,000 |
0.0%* |
4.1% |
|
5 |
QLD |
Nerang |
4211 |
$705,000 |
0.1% |
4.1% |
|
6 |
QLD |
Pacific Pines |
4211 |
$775,000 |
0.3% |
4.0% |
|
7 |
QLD |
Bli Bli |
4560 |
$769,000 |
1.0% |
4.0% |
|
8 |
TAS |
Lauderdale |
7021 |
$725,000 |
0.0%* |
3.9% |
|
9 |
NSW |
Mirrabooka |
2264 |
$755,000 |
0.0%* |
3.9% |
|
10 |
QLD |
Sippy Downs |
4556 |
$770,000 |
0.4% |
3.9% |
Source: Well Home Loans
Image by Warren Brasse via Unsplash
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