Renting is no longer dead money

Finding suburbs where it is cheaper to buy a house than rent while you live in the suburb of your choice is called rentvesting and can be a powerful property investment strategy.

Ever been told that rent money is dead money? In many instances, it is no longer true. 

With interest rates at their current levels, the weekly cost of paying a mortgage is a considerable chunk of your income. 

Most likely it is now cheaper for you to rent in your desired suburb than it is to purchase a home to live in there.  

The Oli Property research team regularly analyses the median house price of over 4,800 suburbs Australia wide, calculating what the average mortgage repayment cost would be versus the current median rent for the suburb. We also compare this to other property data in market to maintain a constant watching brief on how suburbs are performing and where there are opportunities. 

Recent research by Flinders data modelling, and covered in Realestate.com.au, identifies just 5% of Australian suburbs where it is cheaper to own a house than rent.  That’s just 189 suburbs nationally!

What does this mean to you?

If you are considering investing in property but are unsure – you can feel confident that rental demand is generally high as it is much  cheaper to rent than to own.

Nevertheless, the areas where it is cheaper to buy than to rent are some of the areas identified by Oli Property as having strong potential for capital growth.

This is because the affordability of these suburbs attracts home-buyers,  driving demand and therefore pushing prices higher, especially over the longer term. 

Further, because the rental payments are generally larger in these suburbs than the mortgage costs, the probability of owning a cash flow positive property in these areas is higher. 

Also remember, rents and tax incentives can help pay for your investment, so investing in property may cost you much less than you imagine. 

If you live in a capital city close to the CBD and aspire to own your own home, it may make better financial sense not to purchase your own home to live in. 

This is called Rentvesting and it can be a great way to get onto the property ladder by owning a house rather than an apartment without impacting your current lifestyle. 

Rentvesting has other advantages in that it allows you to rent where you want to live and invest where it makes sense. Read more on Rentvesting here.

Want to learn more about how rentvesting could be your property investment strategy? Book a Discovery call with the Oli Property team to find out more. 

This marketing material and its contents is provided for general information purposes only. No part of this marketing material constitutes any advice (financial, tax or otherwise), recommendation or representation to you as to any decision which you should make. You should not use any part of this marketing material to form the basis of any investment decision made by you. Before making any investment decision, you should take independent advice from a professional adviser which takes into account your individual needs and circumstances. All information, opinions and estimates contained in this marketing material are subject to change without notice. We disclaim to the greatest extent possible all liability whatsoever for any loss howsoever arising directly or indirectly from this marketing material or its contents.