The Pros Of Becoming A Rent-Vestor
There are not many people out there who aren’t itching to buy their own home. It’s part of the Kiwi dream, right?! Who doesn’t want a slice of their own piece of paradise. But with slow wage growth and exceedingly high house prices, it’s getting harder and harder to become a traditional homeowner – which is why some people are opting to become rent-vestors instead.
WHAT IS A RENT-VESTOR?
A rent-vestor is a property investor who generally chooses to buy outside the city or suburb where they live. It simply gives them the option to buy in a location that performs well but may not be where they personally want to live because of work, social commitments or other lifestyle requirements.
If you’re struggling to purchase your first home, here are three reasons why you may want to consider rent-vesting.
1: YOU WON’T RISK BEING PRICED OUT OF THE MARKET
More and more people are being priced out of the property market due to not being able to purchase the type of home and location they want to live in. For example, waiting until you have the financial means to buy in the inner-city suburbs may see you miss the boat completely. But on the flip side, rent-vesting allows you to rent in an area that you could not afford to buy in, while having an income producing asset in an area that serves the needs of your tenant. It’s a win, win!
2: YOU’RE CREATING A PATHWAY OF WEALTH
With a booming property market, acquiring a property now means future growth for tomorrow. Having a rental property grow in value means you’ll be able to use that equity to later purchase your own owner-occupied place or use it to buy more investment properties down the track. Either way, those options will be off the table if you choose to do nothing.
3: YOU CAN BECOME A SUPER SAVER
Not only are you able to generate additional income by being an investor through the returns from rent, but you’re also able to save A LOT of money by not personally living in the property. For example, if your mortgage and expenses are all covered by rent (we call this being positively geared), then you can opt for a shared living situation (either with family or flatting with friends) where you’re only paying for a room, not an entire house.
HOW TO BECOME A RENT-VESTOR
While this type of strategy can be a highly effective way to get you on the property ladder and closer to achieving your financial goals, there are still many moving parts that must be managed correctly. For instance, getting the right type of finance and structuring your loans accordingly will be an important component. On top of this, you’ll need to do rigorous due-diligence on where to buy, as well as getting the right property manager in place to ensure your asset is being looked after.
The best place to start is by assessing your overall goals. Where do you want to be in five or 10 years from now? Your first property will often determine your ability to acquire more real estate in the future, so having a clear pathway around how you’ll grow your portfolio is key even before you buy your first investment.
Discover how you can create long lasting wealth through real estate today. Join our free property investing masterclass.
Book your spot now and find out what you need to know about the current market landscape and how you can use it to future proof your finances.
Limited spaces available.
Register now for the free property investor webinar.
By Sue Irons
CEO – Positive Real Estate New Zealand
More Articles
How To Exit Your Business Using Property
Owning a business can be one of the most exciting, overwhelming, and rewarding things that you ever do, but as we journey through life it’s safe to say that our circumstances can and often do change quickly.
Is Now The Worst Time To Buy Real Estate in NZ?
Property prices, inflation, credit crunches, global tensions and high interest rates signal many property investors bowing out and determining that today’s market is the worst time to buy real estate in NZ.
Retirement Planning Tips To Save You From Working Past 65
Gone are the days where owning your own home was enough for a stress-free retirement. With living costs rapidly rising, the age-old dream of retiring at 65 years old is becoming exactly that – a dream. With life expectancy now creeping into the 90s, Kiwisaver and NZ Super pension funds are being stretched much farther than what most have prepared for. Retirement planning is more important now than ever before!
Should You Invest in an Apartment or a House?
Most of us would like to own a regular income stream that pays us weekly with little hassle, right?! RIGHT. That is what residential real estate is fantastic for. But, when it comes to actually achieving passive income from property, should you invest in an apartment or a house?
When Is the Best Time To Invest in Property?
With the cost of living at an all-time high, house prices more than they’ve ever been before and interest rates well on the rise – many people would fairly assume that 2022 is the worst time to purchase property! However, I’m here to tell you that an outlook such as this could lead to you making a very big mistake when it comes to your ability to create wealth.
What Is Second-Tier Lending and How Can Investors Take Advantage?
If you are an investor wanting to grow your property portfolio, then second-tier lending as a finance strategy needs to be on your radar. Over the last 12 to 24 months the New Zealand property market has seen a range of unique conditions. Everything from exuberant growth right across the country, to stricter lending laws taking place and now the rise of interest rates.
How To Use Equity To Purchase An Investment Property
Without a doubt, an investor’s secret weapon to building a profitable property portfolio is their ability to use equity. This is because the one thing we need as property investors, particularly in the acquisition phase of our journey, is access to our money.
6 Ways To Get On The Property Ladder Faster
With a booming property market, it can sometimes feel impossible to achieve that dream of purchasing your first home. Here are six practical ways you can speed up your ability to grab a slice of your very own real estate gold…
Why Your 1st Property Purchase Is the Most Important!
How important is it to buy right the first time? Well, I’d go as far as saying that your very first property could easily be your very last if you don’t play your cards right from the get-go. This is because one of the key ways to build a thriving real estate portfolio is by banking on the growth of a property to support the next one (and so on and so forth) through the process of recycled equity.
Flipping Houses for Profit – Is It Worth It?
It’s the age old question when it comes to making money from real estate. Should you buy and flip, or buy and hold? The potential profits of flipping make it sound instantly attractive compared to the idea of boring long-term investing. BUT – how much money do you really make, and is it all that it’s cracked up to be…