Is rentvesting or rent to own
the best way to get into the housing market?
Renvesting is renting for
$600 per week a home where you want to live in Sydney or
Melbourne and at the same time, investing in a
rental property where it makes sense.
Instead of paying $1,000 pw in loan repayments to buy a $1
You buy two for one – two rental houses / apartments at
You use the rent to cover the loan repayments - receive
$1,000 pw in rent (2 x $500), and pay $1,000 pw in loan
repayments (2 x $500).
You save the surplus (because the properties pay for
themselves) to build up a deposit to add properties to
Rent to own is renting for $850 per week a
home where you want to live in Sydney or Melbourne and
buying the property at the same time.
The rent you pay is $250 per week higher than the market
rent, but instead of being ‘dead money’, the extra rent is
credited to building up the deposit on the home.
The main advantage of rent to own is that you
agree on the price for the home at the start, and you agree
on how much deposit needs to be built up before you need to
take out a bank loan to pay the price. You then calculate
how long the rent to own is to continue until the deposit
has been built up.
In the Australian Financial Review (19-20 August
2017) Jimmy Thompson in the Smart Investor section quotes
me: “There is a clear demand for rent to own because
potential owners can lock in the purchase price while
setting aside money to pay for it”. The image (below) is the