What is Rentvesting
Friday 13 November 2026
For many Australians, the suburbs they want to live in are well beyond what they can afford to buy. The commute, the cafés, being close to family and work: it all comes at a price that keeps home ownership out of reach.
Rentvesting has become a popular way around that problem. Instead of choosing between renting forever or moving somewhere you don’t want to live, you can do both: rent where you want to live and buy where you can afford.
This guide explains what rentvesting is, how it works in Australia, the pros and cons, and why a new build can be a strong option for rentvesters.
What Is Rentvesting?
Rentvesting means renting a home in the area you want to live while buying an investment property in a more affordable location and renting it out to tenants.
It typically suits buyers who are priced out of their preferred suburb, want to keep their current lifestyle, or are not yet ready to settle in one place but want to start building wealth through property. Young professionals, couples living close to work, and people who expect to move for their career are common examples.
How Does Rentvesting Work in Australia?
As a rentvester, you buy an investment property, often in a growth suburb with more affordable prices, and lease it to tenants. You continue renting your own home elsewhere.
The rental income from your investment property helps cover the mortgage repayments, while you pay rent on the home you live in. Because the property is an investment, many of the costs of owning it, such as loan interest, property management fees, insurance, maintenance and depreciation, may be tax deductible.
If those costs exceed your rental income, the property is negatively geared, which can allow the loss to be offset against your other income, subject to current tax rules.
Pros and Cons of Rentvesting
Pros:
Live where you want - You can stay close to work, family and the lifestyle you enjoy while still owning property.
Enter the property market sooner - Buying in a more affordable area can help you get a foot in the market years earlier than saving for a home in your preferred suburb.
Build equity and potential capital growth - Your investment property can grow in value over time, building equity you may later use towards your own home.
Tax deductions - Investment property costs may be deductible, which can improve your cash flow.
Cons:
Paying rent and a mortgage - You will be covering rent on your own home and repayments on your investment at the same time, so your budget needs to handle both.
Landlord responsibilities - Vacancies, maintenance and changes in rental income can all affect your finances.
Capital gains tax - Because the property is not your principal place of residence, capital gains tax may apply when you sell.
Jardene Bathroom
Amayah Interior
Rentvesting and First Home Buyer Grants
This is one of the most misunderstood parts of rentvesting. First home buyer support in Victoria, including the First Home Owner Grant, stamp duty exemptions and concessions and the Australian Government 5% Deposit Scheme, generally requires you to live in the home you buy. If you rent the property out from the start, you will usually not be eligible.
Buying an investment property first can also affect your eligibility for first home buyer support later, as many programs require that you have not previously owned residential property. Before choosing rentvesting, it is worth comparing the long-term benefits against the grants and concessions you may give up by not buying a home to live in first.
Why a New Build Can Suit Rentvesting
If you do decide to rentvest, a new build offers several advantages over an established property.
Under the 2026-27 Federal Budget changes, which have passed Parliament, negative gearing on residential property will be limited to new builds from 1 July 2027 for properties acquired after 12 May 2026. Investors who buy an established property after that date will no longer be able to offset rental losses against their salary, while eligible new builds keep that benefit.
New builds also offer higher depreciation, as investors can claim on both the building and every new fixture and appliance. And a brand new home generally needs less maintenance in its early years and appeals to tenants looking for modern, energy-efficient living in growing communities.
Is Rentvesting Worth It?
Rentvesting can work well, but it is not the right answer for everyone. Before deciding, consider:
Whether your budget can comfortably cover rent, mortgage repayments and unexpected costs such as vacancies
How long you plan to hold the investment property
Whether you intend to move into the property later or use its equity to buy elsewhere
How the strategy compares with buying a first home to live in and accessing first home buyer support
For some buyers, rentvesting offers the best of both worlds. For others, buying a home to live in first and using the available grants and concessions is the better path. Speaking with a financial adviser or mortgage broker can help you work through the numbers.
Rentvesting with Eight Homes
Eight Homes builds across Melbourne’s growth suburbs and Geelong, offering house and land packages in established and emerging communities with strong rental appeal.
Explore our house and land packages or learn more about investing with Eight Homes.
What is rentvesting?
Rentvesting means renting a home where you want to live while buying an investment property where you can afford. It allows you to enter the property market without giving up your preferred lifestyle.
How does rentvesting work in Australia?
You buy an investment property and lease it to tenants, while continuing to rent your own home elsewhere. The rental income helps cover your mortgage, and many investment costs may be tax deductible.
Is rentvesting worth it?
It depends on your budget, goals and timeframe. Rentvesting can help you enter the market sooner, but you may give up first home buyer grants and need to manage both rent and a mortgage.
What are the pros and cons of rentvesting?
The pros include living where you want, entering the market sooner and building equity. The cons include paying rent and a mortgage at the same time, landlord responsibilities and capital gains tax when you sell.
Can first home buyers rentvest and still get the First Home Owner Grant?
Generally not. The First Home Owner Grant in Victoria requires you to live in the home, so renting it out from the start usually makes you ineligible.
Is a new build a good option for rentvesting?
A new build can be a strong option, as eligible new builds retain negative gearing under the 2026-27 Budget changes and offer higher depreciation. They also tend to need less maintenance and appeal to tenants.
This article is general information only and does not take into account your personal circumstances. Grant eligibility, tax rules and the definition of an eligible new build may change. Speak with a financial adviser, accountant or mortgage broker before making any decisions.