With median property prices as high as $1.1 million in some Yarra Valley suburbs, first home buyers may find themselves priced out of the market. But that doesn’t mean you need to give up on the dream of homeownership.

Instead, you may just need to rethink your approach – and consider rentvesting.

Rentvesting is an increasingly popular strategy among young buyers who want to break into the property market without giving up their preferred lifestyles. It allows them to rent where they want to live while purchasing an investment property in a more affordable location.

For first home buyers in the Yarra Valley, this can be a smart workaround; instead of overextending yourself to buy locally, you can continue renting in the region and invest in a lower-cost property – perhaps in regional Victoria or interstate – where rental income helps cover the mortgage.

Here are a few reasons why rentvesting is gaining traction – and could work for you:

1. Affordability and access.

For many young buyers, it’s just not financially viable to buy in their dream suburb. But purchasing an investment property in a more affordable location can be a smarter first step. With a smaller deposit and lower purchase price, you may be able to buy sooner, which means you can start building equity and benefiting from potential capital growth.

2. Lifestyle flexibility.

Renting gives you the freedom to live in a location that suits your personal or professional needs – whether that’s being close to work, family or schools. Meanwhile, your investment property can be located where prices are more attainable and rental yields are stronger.

3. Tax advantages.

Owning an investment property can bring a range of tax benefits. For example, interest on your loan, property management fees, maintenance costs and even depreciation on the building and fixtures may be tax-deductible. That can improve your cash flow and make the investment more affordable in the long term.

4. Potential to grow your wealth faster.

Because the rent from your tenants helps to cover your mortgage repayments, you may find yourself in a better position to save for another property – and sooner. This strategy could give you the opportunity to build a portfolio over time, putting you in a stronger financial position to eventually buy your dream home in the Yarra Valley.

5. More buying options.

Rentvesting opens the door to a wider range of properties and markets as you’re no longer limited to buying where you live. That means you can target locations with strong growth potential, high rental demand or even government infrastructure projects that may drive future capital growth.

Live where you love, buy where it makes sense.

If, like many young buyers who live in the Yarra Valley, you don’t want to give up the convenience or lifestyle benefits that come with living here, rentvesting could be the answer; it allows you to continue enjoying your current lifestyle without having to wait until you can afford to become a homeowner. Furthermore, your investment property is working hard in the background, potentially growing in value and bringing in rental income.

Of course, like any strategy, rentvesting isn’t without its challenges – and managing an investment does come with responsibilities. However, with the right advice and a well-planned approach, rentvesting can be a smart and flexible way for Yarra Valley buyers to take their first steps on the property ladder.

Thinking about rentvesting but not sure where to start? Get in touch with Laura Moya Local Mortgage Broker based in Yarra Valley – Melbourne Victoria at [email protected]. If you’re based in the Yarra Valley and surrounding areas of Melbourne, I’d love to meet with you in person, do a video call or phone call to explore your options and tailor a strategy to help you enter the property market on your terms.