Controversial Australian property guru Jack Henderson has urged people to join the ‘rentvesting’ trend, claiming he doesn’t know why people live any other way.
‘Rentvesting’ is the term used to describe someone who buys property but doesn’t live in it, instead choosing to lease the home our to tenants while also renting somewhere else themselves.
Many younger Australians are taking the ‘rentvesting’ craze a step further as property prices spiral out of their grasp, choosing to buy and rent out their first home while continuing to live with their parents and save money.
While saving money might be the key reason behind most people choosing ‘rentvesting’, Henderson claims the practice has another huge upside.
“I’m a renter, and for the past six years, during this ‘rental crisis’ I’ve moved house every single year,” Henderson posted to his followers on Facebook.
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Aussie property guru Jack Henderson is a big fan of ‘rentvesting’.
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“Not because I have to, but because I actually want to, and I enjoy it.
“Living in Sydney has given me the chance to experience some of the best spots this city has to offer.
“I’ve lived in Manly, Darling Point, Coogee, Bronte, Watsons Bay.
“And by the end of this year, I’ll move again, because I’m never going to know whether I like a suburb or not unless I live there.”
Henderson claims to have amassed a property portfolio worth more than $35 million and while he believes ‘rentvesting’ is a great way to get to know a neighbourhood without committing, he believes it is a financially-sound strategy as well.
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Buying a house is a good investment, but it works better if you rent it out rather than moving in, according to Henderson. Picture: NCA NewsWire/ Gaye Gerard
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“If I bought a property where I currently rent, I’d be living in a space that’s half as nice, while paying three to four times more each month on mortgage repayments than it costs me to rent,” Henderson said.
“For the same cost of owning, I can basically rent something twice as good.
“If you think about what you could afford to buy with your income and compare it to what you could rent for the cost, the gap becomes obvious.”
Henderson’s support of ‘rentvesting’ comes as new data revealed nearly 10,000 people across Australia who took out first homebuyer loans this year had no intention to live in them.
Financial analysts at Money.com.au released the data showing a 21.4 per cent rise in ‘rentvesting’, a trend that had grown faster than loans for owner occupiers, at 9.1 per cent.
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Aussie property guru Jack Henderson is a big fan of ‘rentvesting’.
The growth is also seven times faster than loans for non FHB owner occupier homes, which sit at 3 per cent.
NSW had the highest amount of investors adopting this strategy. Nearly 1 in 10 FHB loans (9.3 per cent) in NSW were found to be used as investments. The state’s FHB investor loans were found to grow the fastest in the country, at 31.4 per cent.
Money.com.au Property Expert Mansour Soltani said he expected this strategy to grow more common in expensive capital cities.
“People just get priced out,” he said. “If we look at the last 30 years, we’ve always been told there’s a big correction coming, and it never comes.”
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