Rentvesting

Rentvesting is the strategy of renting in a location you couldn't afford to buy (typically inner-city Sydney, Melbourne, or coastal lifestyle suburbs) while buying investment property in cheaper, higher-yielding markets (regional, smaller capitals, growth corridors). The mathematical case is that your rent-vs-buy gap funds the deposit and holding costs on the investment, while you still get into the property market and start accruing equity and tax benefits. The lifestyle case is that you live where you actually want to live without being chained to a 30-year owner-occupier mortgage in the same suburb. Most rentvestors plan to convert one of their investment properties back to a PPOR later (and trigger the six-year rule planning).