Rentvesting: Is it right for you?

Rentvesting means renting where you want to live while buying an investment property somewhere more affordable. It’s not a new idea, but with property prices stretching well beyond what many first home buyers can afford in their preferred suburb, more people are considering it. 

Here’s how it works, what’s changed recently, and what to weigh up before you commit.

Why first home buyers are considering rentvesting

Buying in the suburb you actually want to live in isn’t realistic for a lot of first home buyers right now. Rentvesting lets you keep living where suits your lifestyle and job, while your money works in a market you can actually afford. Recent research found 41% of first-home buyers would consider rentvesting as a way into the property market

The benefits of rentvesting

As a tenant, general maintenance and repairs on the home you live in are the landlord’s responsibility, not yours. Your investment property can also generate rental income to help cover the mortgage, and depending on your circumstances, you may be able to claim tax deductions on the property that owner-occupiers can’t.

Rentvesting can also mean entering the property market years sooner than waiting to save enough for your dream suburb. There’s also the potential for capital growth on your investment property over time.

What changed with negative gearing in 2026

This is the part that’s changed the most since we first wrote about rentvesting. From 12 May 2026, established properties bought after that date can no longer be negatively geared against your salary or other personal income. Rental losses can only be offset against rental income or future capital gains from that property, though unused losses can be carried forward.

Newly built homes are exempt from this change, so a new-build investment property still allows full negative gearing and the existing capital gains tax discount. Properties bought before 12 May 2026 are grandfathered under the old rules for as long as you hold them. 

If rentvesting in an established property was part of your plan, it is worth talking it through with your accountant and us before you buy.

Other things to weigh up

Renting means you don’t control the property you live in, and some people find the uncertainty of a lease harder to live with over the long term. Buying an investment property before your own home also means forfeiting the First Home Owner Grant, and investment loans can attract a higher interest rate than an owner-occupier loan.

Rentvesting works best when you go in with a clear head. Research the suburb you’re buying in properly, and be prepared for the practical realities of being both a landlord and a tenant at the same time, including periods where your rental property sits vacant or needs repairs.

Is rentvesting right for you?

Rentvesting can be a genuinely useful strategy if it matches your goals and stage of life, but it isn’t the right fit for everyone. 

Get in touch online, give us a call, or book a free 15-minute Discovery Call to chat ASAP, and we’ll help you weigh it up against buying an owner-occupied home first, factoring in your borrowing capacity, the schemes you may be eligible for, and how the 2026 negative gearing changes apply to your situation.

Disclaimer

Watson Mortgages Pty Ltd (Nestor Ramirez Credit Representative Number 378816 and Gary Gilbert Credit Representative Number 432216) is authorised under Australian Credit Licence 389328. Watson Mortgages Pty Ltd ABN 29 642 538 967 is a separate entity to Elliot Watson Financial Planning Pty Ltd. Elliot Watson Financial Planning Pty Ltd is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429. This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.