Rentvesting is growing in popularity as soaring property prices spur young people to purchase in more affordable locations while continuing to rent where they want to live.

Brisbane tradie mates Riley Nuske, Josh Morgan and Joel Barry are part of the Millennial and Gen Y trend, backed by a study by the Property Investment Professionals of Australia (PIPA), which found nearly 30 per cent of survey respondents who had purchased their first investment property in the past 12 years were rentvestors.

Mr Morgan said he and his former flatmates Mr Nuske and Mr Barry aimed to start small and worked towards purchasing a home in the location of their choice in the future.

“Gen Ys are going it differently these days so we can ultimately achieve the Australian dream of home ownership,” Mr Morgan, 30, said.

“We’re not trying to get wealthy, but we knew that we had to think differently to the way that home ownership has traditionally been achieved.”

The strategy paid off, with Mr Morgan reently also purchasing a home in the inner suburbs of Brisbane.

Mr Barry, 28, said rentvesting approach allowed them to buy in more affordable areas that required smaller deposits as well as servicing calculations that included the rental income helping with finance approval.

“We knew that trying to save a big deposit in our early 20s for a home in a capital city like Brisbane would have taken a decade and by the time we saved enough, property prices would have increased even more,” Mr Barry said.

“So, individually, we decided to start small with the view that eventually we would be able to buy into the areas where we see ourselves living for the long-term.”

Mr Nuske, 26, said adopting an investment mindset for his first property purchase had been also been a game-changer for him.

“Initially the first property is the hardest to get into, but it does get easier as you progress and learn more,” he said.

“Buying your first property is the hurdle that everyone needs to overcome. A lot of young people think it’s too hard, but we’re proof that it’s not if you’re prepared to consider alternative pathways to property ownership.”

Your Property Your Wealth director Daniel Walsh, who helped the tradie trio with their purchases, said the strategy of buying investment properties before their own homes had taken off as saving a deposit became more difficult over the past decade.

“As a Sydneysider myself I was a rentvester for more than 10 years and only purchased my own home in the Harbour City a few years ago,” Mr Walsh said.

Originally Published: Viva Hyde | Realestate.com.au | 21 August 2024

https://www.realestate.com.au/news/how-three-tradies-went-from-flatmates-to-property-investors

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