One of the great opportunities in real estate is the option to become a “rentvestor” – someone who buys a property, rents it out and lives elsewhere.
Rentvesting is becoming increasingly popular with young Americans who want to break into the property market. The concept works on this premise: buy what you can afford, and rent where you want to live.
With the American real estate scene powering ahead, it’s understandable that you’ll want to get a piece of the action.
And rentvesting is a great way to capture valuable real estate in the heart of the city, for example.
Some young rent-vestors still live with their parents or remain in a share house to ensure they can handle the mortgage payments.
As a young investor, you need to be clear on your strategy. As an experienced real estate agent, I believe in the keep-it-simple principle. So, let’s break this down.
You have four key considerations that will affect your buying decision:
- Financial situation – How much money do you have to spend?
- Type of property – Are you seeking a standard apartment, or can you stretch to a complex with security, swimming pool and gym facilities?
- Location – Is there a specific urban area where you want to invest?
- Lifestyle – How much of your lifestyle are you prepared to give up if you need to add cash to the rent you receive to make the mortgage payments?
If you have a good job but insufficient equity and cash-flow to buy property in popular urban areas, “rentvesting” is a great play.
Even with this approach, some young buyers need additional assistance — many team up with their parents or family who can guarantee the bank loan.
As an alternative strategy, where a bank permits, your parents might mortgage a portion of their own home to help their children afford an apartment.
These two additional options mean that even for younger first buyers, home ownership may not be beyond your reach despite the higher prices being achieved in the current property boom.
I encourage you to come into our offices, discuss the strategies and financial choices available to you, and see some of the properties that might fit your criteria.