Rentvesting – It is ‘Horses for Courses’
As the saying goes, ‘Horses for Courses’ or different people are suited to different things, applies to the latest buzzword in the real estate industry ‘rentvesting’.
‘Rentvesting’ is when a purchaser buys in an area they can afford, rents that property out, but continues to live in an alternate location. A link to an interesting read on the topic is below:
While MAP Lawyers does not provide any investment or financial advice, it should be noted that if you buy a property as a ‘rentvestor’, you will:
- Pay the full rate of transfer duty (commonly referred to as ‘stamp duty’), as you will not be eligible for the first home or home concession reductions; and
- If you are considering buying brand new, you will lose out on any entitlements you might otherwise had to claim the first home buyers grant, if you were buying as an owner occupier.
The difference in paying higher transfer duty may however be marginal if the purchase price is low and in a growing market, may ultimately get your foot into the door to property ownership.