Investors, particularly millennials, are increasingly embracing rentvesting – buying properties to rent out while continuing to rent themselves – fuelled by low vacancy rates and soaring rents in the property market, according to James Chase Buyer’s Advocacy.
ABS reported a significant 21.5% increase in the value of new investor loans this February compared to last year, with these loans accounting for more than half of the annual growth in new loans.
Surprisingly, it is not older generations but millennials who are leading this investment surge, increasingly opting for rentvesting due to its flexibility and wealth-building potential.
“We’re seeing a surge of millennial clients who are eager to enter the market through rentvesting,” said George Cherchian (pictured above) of James Chase Buyer’s Advocacy. “They do their research and they’re not afraid to make bold moves if the numbers add up.”
“Millennials are looking at the long-term benefits,” Cherchian said. “Rentvesting not only enables them to get onto the property ladder sooner, but it also positions them strategically for future financial security.
“He further explains that successful rentvesting involves selecting the right properties that offer both value growth and strong rental returns.
While rentvesting offers various advantages, including potential tax deductions, it also comes with challenges like missing out on homeowner grants and facing capital gains tax.
Cherchian urged millennials to educate themselves on property investment basics and financial planning.
“Understand the basics of property investment and the financial implications of being a landlord. It’s crucial to have a solid financial foundation,” he said.
Cherchian also stressed the importance of seeking professional help for navigating the property market.
“You don't have to go it alone; professionals such as a mortgage broker and a buyer’s agent can provide invaluable insights and assistance that help you navigate the market and secure high-quality deals,” Cherchian said.
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