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The pros and cons of being a rent-vestor vs owner occupier

Buying your first property is a huge deal, but deciding if you’re going to live in it or use it as an investment, by renting it out, is just as big.

The pros and cons of being a rent-vestor vs owner occupier

27 February 2024

Rentvesting is an investment strategy where you buy an investment property to build wealth, whilst renting accommodation to live in. Rentvestors are renters and property investors simultaneously.  

It’s different from being an owner-occupier, where, like the name suggests, you live in the property that you own.

Buying your first property is a huge deal, but deciding if you’re going to live in it or use it as an investment by renting it out is just as big, so it’s a good idea to weigh up the pros and cons of each before making a decision.

Rentvesting is becoming increasingly popular among Millennial first-home buyers, who choose to invest where they can afford to buy and rent where they want to live (but can’t necessarily afford to buy). 

For some, buying an investment property is a viable first step in the property market. 

Invest first, occupy later: how rentvesting works

Lawrence Game, a RAMS Home Loan Specialist in Mt Lawley, Perth, explains the trend:

“In the Sydney and Melbourne markets especially, first-time buyers are savvy to the idea of buying a property as an investment first up, because it’s simply too expensive for them to buy in the area they want to live in.
“Rent-vesting is the new word, where people buy a property and rent it out straight away, but rent themselves somewhere else or even still live at home, which can be a big saving. This is a great way to get into the market,” he says.
Lawrence adds that first-home buyers need to balance what is best for them financially with their desired lifestyle. It can be a great way to get into the market whilst still living and working in an area that suits you, but there are a few things to consider before deciding to rentvest.  

The pros and cons of being a landlord vs owner occupier-Pic1 - couple on couch 
Especially with your first purchase, there are pros and cons to being a rent-vestor vs. an owner-occupier. Picture: Getty

Pros and cons of rentvesting

Potential benefits of rentvesting:

  • Your investment property is an asset and you could enjoy capital growth if your property’s value increases over time.
  • A rentvesting strategy could help you build equity and get you into your dream home as an owner-occupier, or help you fund future real estate purchases. 
  • Rentvesting enables you to earn a rental income which may help pay off the home loan or assist with your cash flow. 
  • Like property investors, rentvestors may be eligible for some tax benefits.  It’s possible to deduct interest on a home loan as a tax deduction against other income and reduce your taxable income. 
  • You could live in your desired location, and you’re not limited to where you may be able to afford to buy.
  • Rentvesting could help you take your first step on the property ladder.


  • Because rentvesting is an investment, this could mean forfeiting a First Home Owner Grant (FHOG) and various stamp duty concessions offered by state governments.  Typically, these concessions are only offered to first-home buyers who will be owner-occupiers.
  • As a property investor, you should seek professional advice to help you understand the financial and tax implications of your strategy, including positive and negative gearing and potential capital gains tax liability if you sell the property. 
  • Just like traditional home ownership, you’ll be responsible for the ongoing maintenance costs of the property, from repairs and renovations to council rates and land tax (to name a few).
  • Being a landlord comes with responsibilities. If you’re renting out the property and don’t live nearby, you may wish to engage a property management company to help you.  However, expect to pay a proportion of the rental income you receive for this service.
  • Vacancy rates in the rental market can fluctuate, so you’ll need to make sure you can meet your mortgage repayments even if your property isn’t tenanted.

The pros and cons of being a landlord vs owner occupier-Pic2 - apartment gardens 
As an investor, buyers can be eligible for some tax concessions. Picture:

Can first-home buyers borrow money to rentvest? 

The amount of money a buyer could borrow differs, depending on whether they intend to live in the property (owner-occupier) or use it as an investment (rentvesting). Investor loans typically come with a higher interest rate. 
“Don’t forget Lender’s Mortgage Insurance (LMI) may need to be included in your borrowing capacity,” Lawrence says.
“There are so many things to consider, so we always strongly recommend people speak with an accountant or financial adviser.”

To sum up

Rentvesting could help you live in an area that’s right for your lifestyle, whilst still being able to buy an investment property that fits your budget. It’s a different approach to home ownership. A rentvesting strategy could enable you to build a property portfolio and future wealth so that, one day, you may be able to buy your dream home. 

But it’s worth noting that, as with any investment, there are risks to consider. Rental returns aren’t guaranteed, and you may have additional costs like property management fees. Before making your decision about rentvesting vs being an owner-occupier, it could be a good idea to seek professional advice that’s tailored to your situation. 

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