A new breed of first homebuyers known as the “rentvestors” is taking advantage of the bargain property market in Perth. They are seeking their first home purchase in investment properties in Perth where the property market is not that expensive.
About 25 percent of the first homebuyers in west Australia are purchasing their first home properties as investment properties. This is the highest recorded rate in the country according to the report from Mortgage Choice. The attraction comes in a “rentvesting strategy”. This particular strategy sees the younger people to continue living in rental properties while at the same time becoming the landlords of them- this is the fastest growing trend in the new generation of buyers.
The director of Graham Joyce said that the trend is driven by the desire of the younger buyers to acquire homes that are close to the city but at the same time get their foot as well in the market. The place that they might be able to afford to invest in does not necessarily mean the place that they want to live as most young people want to live close to the place where they work or close to the city. However, they can only afford a house that is further out of the city. It is for this reason that they opt to rent properties. By renting a property while at the same time also investing, they can fulfill their suburb dream and at the same time also earn money on their investment property. With the prices down on rents, today is the best time to jump into this strategy.
The director of M Residential said that while most of the young investors are able to negatively gear their own properties, it is often cheaper for them to take the path of investment before actually purchasing their dream house. The director stressed that savvy buyers would make calculations first and compare their costs as owner occupiers in contrast to investors. The current generation is deemed to be investment focused and most of the young people want to create a portfolio first before acquiring a dream home. It is also for this reason that rentals of granny flats WA are also on the rise.