Rentvesting

Another concern we come across often is how their children are going to be able to get onto the property ladder. With a greater demand in premium locations parents are quite often concerned their children will be unable to live in the location they have grown up in. By purchasing investment properties they are giving their children the option of using the equity in these properties to use as deposits for their own property.

This is also a concern for many councils as they are required to increase infrastructure for an aging population as their younger residents are increasingly moving to cheaper locations. This is another reason for the re-zoning of areas within councils to accommodate medium-high density housing to give first home buyers a chance to stay in their preferred locations.

‘The latest property trend is Rentvesting. This is where you rent in the area you want to live and purchase investment properties in the areas you can afford. This allows you to get a foothold on the property ladder and still maintain the lifestyle you are accustomed to in a much shorter timeframe.’

The other thing to consider when purchasing investment properties is being up to date with any changes to Government Regulations. For example changes in the Depreciation Regulations from 1st July 2017 means that an investor can only claim depreciation if they are the first owner of the property. This was changed from a pro-rata system for properties under 10 years old. As you are generally able to claim 60-80% of the property’s value over 10 years it is a significant loss if you purchase an existing property without knowing the changes.

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