The stigma attached to renting is holding people back from achieving their personal and investment goals, according to one property expert.
For Chris Gray, accredited buyer’s agent and head of Your Empire
, renting, rather than owning his own home, has become an important part of his investment strategy
while still allowing him to live in desirable locations.
Known to some as “rentvesting,” the strategy will be the topic of a talk Gray will give at the Property Buyer Expo to be held in Sydney from 30 0ctober – 1 November.
In Gray’s opinion, the decision to rent, and not buy, a family home is a sound strategy, but he believes societal stereotypes are preventing others from following the same path.
“People in Australia still think renting’s for poor people. They think you’ll be kicked out of where you’re living all the time or you’ll have to live in a place that’s not that nice that you can’t do up,” Gray said.
“The other thing is that a lot of people have grown up with their parents or whoever telling them that rent money is dead money so they’re unwilling to rent,” he said.
Gray believes that if people could move past those notions, then one of the main complaints people have about entering the property market would be no more.
“A lot of people, especially first time buyers, will complain that they’ll never be able to buy where they want to, and unfortunately that’s probably true,” he said.
“It’s more than likely that prices will grow faster than you can save, so why not actually get into the property market in an area you can afford and then rent a home where want to live. To me, that’s an idea that makes sense.”
Gray says rentvesting also makes sense when you look at the numbers.
“Let’s just say you want a family home in Sydney and you have $1.5 million, which may sound like a lot, but it won’t buy you much in Sydney.
"So why not take that $1.5 million and buy two smaller $750k properties and rent them out for $700 a week?
"You can then use that $1,400 a week to rent a $3-4m home as expensive properties rent for half as much as median priced ones as there’s no rental demand for them.
“That way you also get the tax concessions that come with having deductible investment mortgages.”
Gray said the key to being a successful rentvester is taking the emotion out the decision, something that was shown to him by clients of his own years ago.
“When it comes to somebody’s home they can be quite emotional about it, but you just have to put that to the side and look at the numbers side of things.
“I had some clients who were building their dream home, a $6 or $7 million dollar house in Sydney and were renting a great house for around the corner for peanuts during construction.
“When they moved into the house they built they realised it didn’t suit their needs at the time and they were better of renting and seeing them make that decision was one of the things that I really learned from.”
The Property Buyer Expo takes place from 30 October until 1 November at the Sydney Showgrounds in Homebush. Come say hi to the YIP team at the Expo and hear from some of the best minds in Property. Get your free tickets by entering the code YIPPBE when you register at www.propertybuyerexpo.com.au.
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