Rentvesting Melbourne: The Essential Things You Must Consider
If you’re looking to put your foot in the property market door for the first time and aren’t sure about your options, have you considered rentvesting Melbourne?
Our latest post Rentvesting Melbourne: The Essential Things You Must Consider is our latest simple guide.
Becoming a homeowner for the first time can be a tricky path to navigate, but it doesn’t have to be and jumping on the rentvesting Melbourne path could be the avenue you need to go down.
If you’re sitting there wondering what on earth is involved in rentvesting Melbourne, than you have come to the right place and here at Ellite New Homes, we have some of the answers to help you. Rentvesting is where a first timer buys or builds an investment property in a location they can afford, while still living where they want elsewhere, thus entering the housing market without scraping the bottom of the money jar in the process.
Why rentvesting is a good idea
Taking on rentvesting is a good way to get your foot in the housing market door.
By purchasing in a suburb that you can afford will have less of an impact on your finances compared to your dream location. Also if the area you choose has more affordable rental rates, your property has the potential to pay for the mortgage, lower the overall costs for you.
Short-term pain for long-term gain – Finding an area that will give better financial return rather than just the best lifestyle results means that while initially it is cheap to build now your property may appreciate in value over time.
It’s a great stepping stone for future plans – getting your foot in the door of the housing market now will certainly help with future investment in property.
If you put all the right steps in place now, your first investment property could very well be your first chapter in what will eventually become a great property portfolio.
The downside to rentvesting
With every path we follow in life, there are risks, especially if there’s money involved.
If you don’t plan on living in your first home purchase, you don’t qualify for the First Homeowners Grant.
This is one for first-timers who intend to live in the property.
Another downside to not living in the property is that you aren’t exempt from paying Capital Gains Tax when you sell for a profit in the future.
Some aspects are out of your hands – while you may be the owner of the house, you are relying on those within the property (your tenants) to help pay for the house.
And if they happen to drop the ball, you have to cover the cost along with any other costs you are already responsible for.
While it’s an exciting chapter in your life, it goes without saying, you should do all the necessary research before choosing rentvesting. If you just want to get into the Melbourne housing market, than this is the best option for you. Have more questions or want to know more about stepping into the property market?