Rentvesting has become a popular strategy for people who want to get into the market without leaving the suburb they love. Instead of buying where you live, you rent where you live and buy an investment property somewhere more affordable.
It can work well. It also changes which schemes you can use and how lenders assess you.
How it works
Say you rent in the Inner West of Sydney for $750 a week and love it. Buying a comparable home there might cost $1.6 million. Instead, you buy a $650,000 house in a regional centre or another state, rent it out, and keep renting in Sydney.
You've entered the market, the property earns rent, and you keep your lifestyle.
The advantages
Get into the market sooner. A cheaper property means a smaller deposit and loan.
Choose markets on fundamentals. You can buy where rental demand and growth prospects are strong, not just where you happen to live. In 2026, Perth (+10.1% annually to September) and regional areas (+5.6%) outperformed the capitals, according to Cotality.
Rental income helps with repayments. Lenders count most of the rent (often 70% to 80%) towards your income.
Tax deductions. Interest and other costs on an investment property are generally deductible against the rent.
The downsides
You lose first home buyer concessions. The 5% Deposit Scheme, Help to Buy, and stamp duty exemptions generally require you to live in the property. As an investor, you'll typically need at least a 10% deposit plus LMI, or 20% to avoid it, and you'll pay full stamp duty.
Investor rates are higher. Investment loans usually cost more than owner-occupier loans.
You pay rent and a mortgage. If your tenant leaves, you cover both.
Tax changes are coming. From 1 July 2027, negative gearing will only apply to new builds for properties bought after 12 May 2026. Properties held before that date are grandfathered. The CGT discount is also being replaced with indexation for gains after 1 July 2027. Read more in Negative gearing and CGT changes.
Land tax. Investment properties may attract land tax, depending on the state and land value.
Does rentvesting affect my first home buyer status later?
This is important.
- Stamp duty concessions usually require that you've never owned residential property. Buying an investment first can rule you out later.
- The 5% Deposit Scheme requires you to be a first home buyer or not have owned in the last 10 years.
- First Home Super Saver can't be used once you've owned property.
So rentvesting first can mean giving up tens of thousands in concessions down the track. Run the numbers both ways.
A rough comparison
| Buy to live in ($780k, NSW) | Rentvest ($650k, regional) | |
|---|---|---|
| Deposit | 5% ($39,000) via scheme | 10% ($65,000) + LMI, or 20% ($130,000) |
| Stamp duty | $0 | Full duty applies |
| Rate type | Owner-occupier | Investor (higher) |
| Ongoing | Mortgage only | Rent + mortgage, offset by rental income |
For some people rentvesting still wins, especially those who would never want to live where they can afford to buy.
Who it suits
- Higher-income renters in expensive suburbs
- People who move often for work
- People with no plans to live in the property they can afford
- Those comfortable managing a tenanted property
Frequently asked questions
Can I later move into my rentvested property?
Yes. If you move in, it becomes your home. You can't get first home buyer stamp duty relief retrospectively.
Do lenders treat rentvestors differently?
Your loan is assessed as an investment loan, and your own rent is counted as an expense.
Is rentvesting better than buying with a 5% deposit?
It depends on your goals, income and where you want to live. We'd compare both before you decide.
Thinking about rentvesting? Call Finfident on 0424 545 654. We'll compare it against buying to live in, including the concessions you'd give up.
This article is general information only and doesn't take into account your objectives, financial situation or needs. Figures, rates and scheme rules are current as at October 2026 and can change. Finfident Finance Brokers (ABN 94 679 280 801) is Credit Representative 569374 of Outsource Financial Pty Ltd (ACN 131 090 705), Australian Credit Licence 384324.