Rentvesting is gaining momentum as a savvy way to break into the property market of your choice, even as prices keep climbing.
Soaring property values and an ongoing housing shortage are making it increasingly difficult to get a foothold in the market, particularly in capital cities. While some aspiring homeowners are moving to smaller, more affordable cities, others are choosing a different path. Unwilling to relocate but keen to start building equity, they’re turning to rentvesting.
The concept is simple: rentvesting involves buying an investment property in a more affordable location, renting it out, and continuing to live where you want by renting.
"It hasn't really been a thing in the past. But there are a lot of people who might not necessarily want to move away from their family and friends, and they can't afford to buy where their family lives. But they can afford to rent there," Adam Bradley, founder and director of Brisbane-based brokerage Emerge Finance, told Australian Broker. "So they keep renting where their lifestyle is. At the same time, they still want to invest and get exposure to the market. So they invest elsewhere. We're seeing that a lot more often."
Bradley pointed out that first-time homebuyers who are investors often don't qualify for government grants and housing schemes.
"But at least they're still investing, and they're renting where they want to live, which is near their work and friends and lifestyle," he said. "They might not be able to get something for $1 million where they live. So they'll go and buy an investment property for $800,000 or $900,000 in another area."
Momentum is clearly building. According to Westpac, 54% of first-time homebuyers in 2025 were considering rentvesting as a pathway into the property market, an increase of 4% from the previous year. Meanwhile, investor loans in the first-time homebuyer segment grew 21.4% in 2024, year-over-year, according to a report by Money.com.au.
And there are no signs of that momentum easing in 2025. In fact, market players are saying it's only increasing as the housing shortage drags on and property prices keep climbing.
"Rentvesting has always been popular, but I would say in the last 24 months it has really ramped up again," said Nick Reilly, founder and chief executive officer of Melbourne-based brokerage Inovayt. "And that's because of access to information about it through social media. And because young people want to live within 10 kilometers of the CBD. But for them to buy a property in that area, they can't afford it. Because they're 28 years old, or whatever age they might be. But renting is cheaper than mortgage repayments. So they invest in an area that makes sense. That could be another state; it could be another suburb. It could be a different type of property."
Cath Ryan, head of sales and strategic partnerships at Better Choice Home Loans, added: "It's actually not a bad strategy.
"When borrowers look at property in capital cities, they tend to look at it as an investor, from a capital growth perspective," she explained. "In most regional centers, it's considered to be more of an income play, because your rental is usually higher, but your capital growth is not as much. If you buy in a regional area, you potentially pay off your mortgage faster, if you've got a higher rental return. And then you can build equity more quickly. But you're not necessarily going to get the capital growth in a regional center. But you've got a higher rental return, which will help you get to that first point. And then you can sell that property and have a good deposit with the equity that you've built there, and then you can potentially look to buy later on in the capital city of your choice."
