For many Australians, the dream of homeownership is evolving. As property prices climb and lifestyle priorities shift, an increasing number of first-time buyers are turning to rentvesting as a smart and strategic way to enter the property market.
Rentvesting is when you rent a property in your preferred location—often close to work, lifestyle hubs, or family—and purchase an investment property in a more affordable or high-growth area. This approach allows you to build wealth through real estate, without compromising your lifestyle.
But how does rentvesting work with home loans? And what should you know before financing your first investment property?
Buying your first home where you want to live isn't always practical. High prices in major cities often mean you'd either have to delay buying or settle for a smaller, less desirable home.
Rentvesting gives you a third option.
While rentvesting is a smart strategy, securing a loan for an investment property differs slightly from buying a home to live in.
Here’s what you need to know:
Lenders typically require a minimum 10% deposit for investment loans. However, a 20% deposit helps you avoid Lenders Mortgage Insurance (LMI).
Tip: If you’re tight on savings, consider a guarantor loan or use equity (if applicable) from other assets.
You can access various loan structures for your investment, including:
Tip: A split loan can offer the best of both worlds—stability and adaptability.
Unlike a home you live in, investment properties generate income. Lenders often include a portion of expected rental income when assessing your borrowing capacity.
However, they usually apply a buffer (e.g. 70–80% of projected rent) to account for vacancy periods and expenses.
One of the biggest financial perks of rentvesting is the potential for tax deductions, including:
Tip: Speak with a qualified tax advisor to understand the full benefits.
Even if you’re not living in the investment property, your rent payments are factored into your loan application. Therefore, keeping your living costs manageable will help strengthen your borrowing position.
Rentvesting isn’t just a workaround—it’s a strategic investment plan. It allows you to start building a property portfolio sooner, without being locked into living somewhere you don’t love.
It works especially well for:
At DDP, we understand that every buyer's journey is different. Our expert team helps rentvestors:
We take the complexity out of financing your first investment, so you can focus on building your future.
If you're considering rentvesting as your first step into property, it's essential to have the right finance strategy in place. With the right guidance and loan structure, you can live where you want and invest where it counts.
Let DDP help you finance smarter, build wealth faster, and take your first step as a property investor with confidence.
