While "rentvesting" may not suit everyone's lifestyle, there are situations where it can help investors working towards long-term financial independence.
"This is more common in people in their late 20s to 30s, but I have also helped couples in their 50s with this," shares Simon Pressley, head of market research real estate and director of Propertyology.
"When done right, the locations in which 'tenants' purchase a property are chosen based on the potential for short-term capital growth and are not negatively influenced by biases such as where the person lives. "
In fact, Pressley had met a couple in their fifties who wanted to embark on a better path to retirement. But while the couple had not invested previously, they held a favorable share of the equity in the family home.
"They recognized that a family home without debt still does not generate income in retirement," Pressley says. “We worked with them on the pros and cons of a few strategies and they chose to sell their house and live in a hip, rented apartment in a more central location.”
Profits from the sale of the couple's family home were split and used to acquire three investment properties in three entirely different locations across the country.
During this time, the couple were able to live closer to town and to the beach; soak up the idyllic lifestyle that they had never dreamed of before to achieve.
"The combined growth in capital value of their three investments was greater than the growth in what their former family home would have produced, the impact on their household budget was smaller than when they were in their household budget. They had the mortgage and the beautiful apartment that they were renting improved their lifestyle, "Pressley shares of the financial difference the" side-thinking "approach to" rentvesting "was bringing to the couple.
Top suburbs:
Chermside
,
Canterbury
,
trott park
,
tiwi
,
Torrensville
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