What is Rentvesting?
Have you ever come across the term rentvesting? Nowadays, you may find many young couples and families putting off their plans of buying their primary residence right away. Rentvesting is a new approach to wealth-building and you could look at it as a stepping stone to reach your goals of buying your dream house in the future. The idea is to initially rent where you want to live whilst buying a property where it is most affordable and then rent out that purchased property to a qualified tenant. Your rental property becomes your additional source of income.
Why is rentvesting a popular option?
In recent years, we are determined more than ever to buy and secure a property. Before considering other essential factors such as mortgages and home loans, make sure you have also looked into the possibility of rentvesting. To some people, investing before purchasing a house seems like a reverse but sound approach. It has the potential to help you gain property ownership even with the current economic climate.
Here are some of the reasons why rentvesting is popular today:
- Rentvesting Earns Money
Even young and first-time home buyers that enter the housing market in a much earlier stage can become successful in rentvesting. The whole concept of rent-vesting is to delay your plans of buying your dream house and rather invest on a property through renting it out. You earn extra income through the collected rent then you can use it to pay the mortgage of the property you purchased.
- Rentvesting Helps You Choose a Better House
A lot of home buyers settle for less simply because they opt for a smaller mortgage that they can afford. You may be able to avoid this if you try rent-vesting. With sufficient money from your investment, you have better options in finding your true dream house. The key is to research and find viable rental properties where you have many potential tenants. Renting out the property potentially offers cash flow which you can save for the mortgage of your dream house in the future.
- Rentvesting Makes Financial Sense
When buying an investment property that you will rent out to qualified tenants, you need not compromise on the price and location. Rental properties are more affordable in certain areas, even if that area is not necessarily the place where you want to permanently live in. You can choose a rental property with a high potential to help you save money for the future. Rentvesting could help you save the substantial amount of money that you will need in order to purchase your dream house, not now – but in the near future.
Consider it as your stepping stone towards purchasing your first home. It is a potentially viable means to an end. In spite of the promising benefits, there are also setbacks along the way. Thus, the most important thing for you to do is to consult a specialist in the world of rent-vesting, home loan, mortgage, and more. Contact our trusted mortgage brokers today!