19 Oct 2023 Q&A – Rentvesting Vs Owner Occupying your First Home
What is rentvesting? What are its advantages? And who is it for?
Ever wondered if you can buy a property (or build an entire portfolio) while still living in the dream (that could be mum and dad’s home, or another rental)? Well, you can.
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Today, Evelyn answers your key questions on how rentvesting is done.
Evelyn also answers the key question: “Are you still eligible for the First Home Buyer Stamp Duty concessions if you have an investment property?”
And finally, we look into the pros and cons for buying a property in your individual name, when you are in a defacto relationship.
This is certainly not one to be missed!
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https://www.everlend.com.au/
There’s plenty more great content to come … so make sure you subscribe now on Apple Podcasts or Spotify so you don’t miss a thing.
You Have My Interest is brought to you by Everlend, a mortgage and finance broking firm built for the purpose of educating and empowering you to make informed financial decisions tailored to your wealth goals. Find out more and book in your free initial consultation at https://www.everlend.com.au/
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Find out more about You Have My Interest at everlend.com.au/podcast and connect with us at podcast@everlend.com.au
You Have My Interest provides information and educational content relating to mortgages, finance and property. You Have My Interest‘s content is general in nature and does not take into account the individual financial, legal or tax needs or objectives of its audience members.
It is not intended as a substitute for professional advice. Listeners should seek out a licensed professional to discuss their individual financial, legal and tax requirements.
If you need mortgage or finance advice tailored to your own personal situation, contact Everlend today for a free consultation. Everlend are authorised credit representatives of Loan Market Pty Ltd, Australian Credit Licence number 390222.
Podcast produced with Apiro
Please find a Podcast summary below with the interview highlights:
Evelyn’s latest episode is a Q&A session building on last week’s discussion about choosing the right type of property to buy first, focusing on topics like rentvesting, investment strategies, and first-home buyer benefits.
Key Takeaways:
- Rentvesting vs. Buying Your Own Home:
- Rentvesting is gaining popularity as it allows people to purchase property in affordable areas while living in desired locations.
- Benefits include entering the property market sooner and leveraging capital growth, though it requires a larger deposit and lacks first-home buyer concessions.
- It’s particularly effective for those living at home or in shared arrangements, enabling higher borrowing capacities and potential for building portfolios.
- Investment Property and Future First-Home Benefits:
- Buying an investment property first doesn’t disqualify you from future first-home buyer stamp duty concessions in some states (e.g., Victoria). However, eligibility depends on specific state rules and could exclude certain incentives like government-backed guarantees.
- Property Ownership in Relationships:
- Couples often strategise property ownership based on asset protection, tax benefits, or borrowing capacity. Investment properties may be owned by one partner for tax efficiency (e.g., negatively geared properties in the higher-income earner’s name).
- Lenders assess borrowing capacity differently when properties are purchased individually versus jointly, often factoring in shared expenses, which can impact serviceability.
- First-Home Buyer Benefits for Couples:
- First-home buyer benefits are typically limited to one property per couple, not per individual. Couples should carefully weigh whether to use joint borrowing capacity to maximise their purchase rather than limiting themselves to lower-value properties to save on concessions like stamp duty.
Evelyn concludes by encouraging listeners to revisit the previous episode for foundational insights and hopes the Q&A session provided valuable clarity.