With soaring property prices and high interest rates, “rentvesting” is becoming an increasingly popular strategy for first-time buyers. Sydney resident Hayley McCoy, after struggling to save for a home deposit, turned to rentvesting—buying an investment property in Brisbane while continuing to rent in Sydney. Although it felt unconventional, McCoy’s decision allowed her to build equity in a more affordable market.

Rentvesting is growing, especially among younger Australians seeking creative ways to enter the property market. Analysis by Mozo shows that 6.8% of first-home buyers in 2024 are also investors, up from 4.2% in 2020. Financial experts like Helen Baker emphasize the importance of careful planning, as balancing mortgage payments with rent and navigating potential rate increases can be challenging.

Rentvesting offers a foot in the property market, but it comes with risks, including higher interest rates on investment loans and the possibility of negative cash flow. McCoy’s experience underscores the need for thorough financial planning, as rental income may not always cover mortgage repayments.