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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