Rentvesting in Perth: Rent Where You Live, Own Where You Can
You keep the suburb you want to live in and buy the one you can actually afford. Both halves have a cost.
Rentvesting Perth buyers consider means renting where you want to live while owning an investment property somewhere more affordable. It suits some people very well and costs others real money, and the difference is worth modelling before you commit.
Rentvesting Perth buyers use means renting where you want to live while owning an investment elsewhere, forfeiting owner-occupier pricing and most concessions.
You give up owner-occupier pricing and most first home concessions.
"Rentvesting gets sold as a clever hack. It is a legitimate strategy with a specific trade-off, and the people it suits know exactly what they are trading."
AMRINDER SINGH
Key Takeaways
Here is how rentvesting Perth buyers use actually works, what you gain, what you give up, and the situations where it genuinely outperforms buying to live in.
Rentvesting Perth buyers use means renting in your preferred suburb while owning an investment property elsewhere. It brings forward ownership but forfeits owner-occupier pricing and most first home buyer concessions..
How Rentvesting Actually Works
The rentvesting Perth structure is simple. You continue renting the home you live in, and separately buy a property you rent out to someone else.
The investment property generates rental income, which offsets part of the loan repayment. Your own rent continues alongside it, so you are servicing two housing costs rather than one.
Where rentvesting Perth buyers benefit is location. The suburb you want to live in may be well beyond your borrowing capacity, while a property in a more affordable area is comfortably within it.
You get into the market at today’s prices rather than waiting until you can afford your preferred suburb, and the investment builds equity in the meantime.
The trade is that you are a landlord and a tenant simultaneously, with the obligations of both.
What You Give Up
This is the part of rentvesting Perth that gets skimmed over, and it is where the real cost sits.
Investment lending prices higher than owner-occupier lending, and the gap is not trivial across a thirty year term. You are borrowing on the more expensive side of the market by definition.
First home buyer concessions are generally forfeited. Stamp duty concessions and grants typically require you to live in the property for a minimum period, so buying to rent out usually disqualifies you.
The federal low deposit guarantee schemes are owner-occupier only, so a rentvesting Perth purchase cannot use them.
You also lose the capital gains tax main residence exemption on that property, since it is not your home. That is a longer term consideration but a significant one, and it belongs in the conversation with your accountant rather than your broker.
FREQUENTLY ASKED QUESTIONS TO AI
What is rentvesting and how does it work?
Rentvesting means renting the home you live in while owning an investment property somewhere else entirely. The rental income helps service the investment loan while you keep living where you actually prefer. Rentvesting Perth buyers use brings ownership forward, but it costs owner-occupier pricing and most first home buyer concessions.
Is rentvesting a good idea in Perth?
It suits buyers whose preferred suburb is well out of reach but who do not want to keep waiting to enter the market at all. It works poorly if the numbers only stack up on optimistic assumptions. Model both scenarios with real figures, including your own rent, before deciding either way.
Can first home buyers use rentvesting?
Technically yes, but most first home buyer benefits are lost in the process. Grants and stamp duty concessions generally require you to live in the property for a minimum period, and the federal low deposit guarantee schemes are owner-occupier only. Weigh those forfeited benefits carefully against the earlier market entry.
Do I pay more interest as a rentvestor?
Usually yes. Investment loans price higher than owner-occupier loans do, and interest only terms can add a further margin on top of that. Across a long term the difference is substantial, so do include it when comparing rentvesting Perth options against simply buying a home you would live in yourself.
Can I live in my investment property later?
Yes, and many rentvestors plan for exactly that outcome right from the start. Moving in later can change the loan from investment to owner-occupier pricing, and it may affect the capital gains tax treatment. Speak to your accountant about the timing, because the consequences will depend on how long the property was rented out.
Is rentvesting cheaper than buying a home to live in?
Not necessarily cheaper, but often far more achievable sooner than waiting. You carry your own rent alongside the investment loan repayment, offset by the rental income. Whether the total cost is lower depends on rents, on prices, and on the pricing gap between investment and owner-occupier lending in your situation.
When It Genuinely Works
Rentvesting Perth buyers succeed with tends to share a few features, and it is worth checking whether you fit them.
The rent you pay is meaningfully below what a mortgage on the equivalent property would cost. If renting your preferred suburb is nearly as expensive as owning there, the strategy loses its point.
The investment property is chosen on investment fundamentals rather than as a consolation prize. Yield, vacancy rates and growth prospects matter more than whether you would enjoy living there.
Your income and job are portable or stable enough that you are comfortable being a tenant for several years.
And you have run the numbers on the forfeited concessions honestly. For a first home buyer with access to grants and a low deposit scheme, those benefits can outweigh the location advantage entirely.
When It Does Not
Equally, there are situations where rentvesting Perth is the wrong answer and it is better to say so plainly.
If you are a first home buyer eligible for a grant, a stamp duty concession and a low deposit guarantee, the combined value of those is substantial and rentvesting forfeits most of it.
If your preferred suburb rents at close to mortgage cost, you are paying investment loan pricing for very little locational gain.
If you intend to move into the property within a year or two, the tax and pricing complications may outweigh the short term benefit.
And if the investment only works assuming continuous tenancy and no maintenance, it does not work. Vacancy and repairs are certainties, not risks.
Modelling Both Paths
The rentvesting Perth comparison only means something if both sides carry the same costs.
On the rentvesting side, count your rent, the investment loan repayment, shaded rental income, management fees, maintenance, insurance and rates. On the owner-occupier side, count the mortgage, rates, insurance, maintenance and any concessions you would receive.
| Consideration | Rentvesting | Buying to live in | Decides it when |
|---|---|---|---|
| Loan pricing | Investment, higher | Owner-occupier, lower | Long term hold |
| Concessions | Generally forfeited | Available if eligible | You are a first home buyer |
| Location | Live where you want | Live where you can afford | Commute or schools matter |
| Tax | Deductions, but CGT applies | Main residence exemption | Long hold, large growth |
The concessions row decides most first home buyer cases. Our rent versus buy calculator handles the ordinary comparison, and a first home buyer conversation covers what you would be giving up.
The Two Honest Scenarios
Rentvesting suits you | Buying suits you | |
|---|---|---|
Your suburb | Far beyond your capacity | Within reach or flexible |
Your status | Not eligible for concessions | First home buyer with access |
Where you sit on the second row usually settles it. Moneysmart covers the investment risks worth weighing alongside.
EXPERT INSIGHT
Amrinder Singh, Specialist Broker at Ezy Loans Australia
“I have talked first home buyers out of rentvesting Perth strategies more than once. Once you total the grant, the duty concession and the deposit scheme, the maths often points the other way entirely.”
Rentvesting is a legitimate strategy, not a shortcut. It works when the trade is made deliberately and fails when it is assumed.
PUT THIS INTO PRACTICE
Model rentvesting Perth against buying over ten years with real numbers, including your own rent and every concession you would forfeit. Take the model to your accountant before you take it to a lender.
FREQUENTLY ASKED QUESTIONS
Everything Perth Buyers Ask,About Rentvesting
Can I rentvest with a small deposit?
It is harder than an owner-occupier purchase, because investment lending usually requires a larger deposit and lenders mortgage insurance applies below the threshold. The federal low deposit guarantee schemes are owner-occupier only, so they are not available for a rentvesting purchase at all.
Does rentvesting affect my ability to buy a home later?
It can. The investment loan repayment counts as a commitment when a lender assesses you later, reducing capacity for a subsequent purchase. Rental income helps but is shaded. Plan the sequence deliberately if you intend to buy a home to live in within a few years.
Should the investment property be in Perth or interstate?
It depends on fundamentals rather than familiarity. Buying interstate means unfamiliar markets and remote management, while buying locally is easier to oversee. Some lenders also treat certain postcodes more cautiously. Decide on yield, vacancy and growth rather than on convenience alone.
Are the loan repayments tax deductible?
Interest and many holding costs on an investment property are generally deductible against the rental income, unlike an owner-occupied home. The rules are specific and depend on your circumstances. This is general information, so confirm the treatment with your accountant before relying on any deduction.
What happens if the property is vacant?
You cover the full loan repayment yourself alongside your own rent, which is precisely why lenders shade rental income when assessing you. Budget for several weeks of vacancy each year rather than assuming continuous tenancy, and keep a buffer for it.
Can I rentvest with a partner who owns property already?
Yes, though your partner’s existing property affects the assessment. Their loan repayments count as commitments and any concession eligibility may be lost for both of you on a joint application. Get both positions assessed together before deciding whose name the purchase should be in.
Rentvesting Perth buyers consider is a real strategy with a real trade-off, and the numbers decide it rather than the idea. Ezy Loans Australia models both paths as part of our investment lending service, including the concessions you would forfeit. The first conversation is free.
Written by Amrinder Singh
Amrinder Singh is a Specialist Broker and the founder of Ezy Loans Australia, working from 905 Hay Street in Perth. He arranges first home, refinance, investment, construction, self employed, personal and asset finance across a panel of Australian lenders, and holds Credit Representative number 505232 under Australian Credit Licence 377294. Ask him to model rentvesting against buying before you decide.
Disclaimer: This article is provided for general information only and does not take into account your objectives, financial situation or needs. Concession eligibility and tax treatment depend on your circumstances and change without notice. This is not tax or investment advice. Consider whether the information is appropriate for you and seek professional advice before acting. Credit assistance is provided by Amrinder Singh, Credit Representative 505232, authorised under Australian Credit Licence 377294 held by Mortgage Australia Group Pty Ltd.
Ezy Loans Australia is a Perth-based mortgage and finance brokerage helping first home buyers, investors and refinancers across Australia secure the right loan with confidence.
Contact Info:
- 905 Hay St, Perth WA 6000
- amrinder@ezyloansaustralia.com.au
- 0432 066 362