Rentvesting: Rent Where You Want, Buy Where You Can
Rentvesting lets you rent in your preferred suburb while buying an investment property somewhere affordable. Here's how it works in Perth.
Can’t afford to buy in the suburb you want to live in? Rentvesting might be your answer. It’s become increasingly popular with young Perth professionals.
What is rentvesting?
You rent where you want to live (close to work, lifestyle, schools) and buy an investment property somewhere the numbers make sense (affordable price, strong rental yield, growth potential).
You become a landlord first — and a homeowner (of your actual residence) later, when you can afford it.
Why Perth is a good rentvesting market
- Rental affordability is tight but manageable in inner suburbs
- Growth corridors like Baldivis, Ellenbrook and Butler offer affordable entry points
- Strong rental demand in outer suburbs keeps yields healthy
The pros
- Get into the property market sooner
- Live in a suburb you couldn’t afford to buy in
- Tax benefits — rental income, deductions, depreciation
- Build equity while keeping lifestyle
- The investment can later be sold, used as equity, or kept long-term
The cons
- No FHOG (the grant only applies to owner-occupied new homes)
- Capital gains tax applies when you sell
- You’re a landlord — that comes with responsibilities
- You don’t benefit from the principal place of residence CGT exemption on the investment
- Rent money to your landlord is “dead money” emotionally for some people
How the numbers work
Say you want to live in Subiaco but can’t afford a $900k home there. Instead:
- Rent a 2-bed apartment in Subi: $600/week ($2,600/month)
- Buy a $500k townhouse in Rockingham that rents for $520/week
- Your Rockingham property generates $2,253/month in rent, offsetting most of its mortgage
- Your out-of-pocket rent is effectively subsidised by tax deductions on the investment
Your actual situation will vary — the above is illustrative only.
Is it right for you?
Rentvesting suits people who:
- Prioritise lifestyle and location for where they live
- Are comfortable with the admin of property investment
- Have stable income and can handle vacancy periods
- Plan to buy a principal residence eventually
Talk to the right people
Rentvesting works best with coordinated advice from a mortgage broker and accountant. The loan structure, ownership structure, and tax strategy all matter. We work alongside your accountant to get it right.
Discuss a rentvesting strategy →
General information only. Seek independent tax, financial and legal advice for your circumstances.