What Is Rentvesting, and Does It Stack Up?
Published 31 May 2026
The short answer
Rentvesting means renting the home you want to live in while buying an investment property somewhere you can afford, often a cheaper suburb or city. You become a landlord and a tenant at the same time, getting onto the property ladder without being tied to where you actually want to live. Whether it stacks up comes down to comparing your rent plus the investment property's net holding cost against the all-in cost of buying your own home. That's a numbers exercise, and the answer is rarely the same for two people.
How rentvesting works in Australia
The idea is simple: live where you want, invest where the numbers work. Instead of stretching to buy a home in an expensive area, you rent there and put your deposit into an investment property in a more affordable market, then rent that property out.
A few Australian specifics shape whether it's worthwhile:
- Stamp duty is higher. Investment buyers don't get first-home-buyer concessions. In NSW a first-home buyer pays $0 transfer duty up to $800,000, but an investor pays the standard rate: about $30,412 on an $800,000 purchase (per Revenue NSW; see investor vs owner-occupier stamp duty).
- You forgo first-home-buyer schemes, for now. The First Home Guarantee (5% deposit, no LMI) and the First Home Super Saver Scheme ($50,000 lifetime release cap) only apply when you buy a home to live in. Buy an investment first and you may use up your "first home" status, though rules vary, so check eligibility before deciding.
- Land tax and rental income apply. Investment properties attract land tax in most states once you're over the threshold, and rent is taxable income (offset by deductible expenses; see negative gearing).
- LMI still bites under 20% deposit. Without the guarantee, a deposit below 20% means Lenders Mortgage Insurance.
A worked example
Compare two paths for someone with a $120,000 deposit who wants to live in an $800,000-area but can buy an investment for $600,000.
| Buy your own home ($800k) | Rentvest ($600k investment) | |
|---|---|---|
| Purchase price | $800,000 | $600,000 |
| Deposit | $120,000 | $120,000 |
| Loan (after deposit) | $680,000 | $480,000 |
| Stamp duty (NSW) | $0 (first-home exempt) | ~$22,335 (investor) |
| LMI | ~$0 if ≥80% | $0 (80% LVR) |
| Monthly loan repayment @ 6% / 30yr | ~$4,077 | ~$2,878 |
| Plus: rent you pay to live where you want | $0 | ~$2,600/mo |
| Less: rent received from tenant | $0 | ~$2,200/mo |
In the rentvesting column, the net monthly outlay is roughly $2,878 (loan) + $2,600 (your rent) − $2,200 (rent income) = ~$3,278, before tax effects, land tax and ongoing costs. The owner-occupier path costs ~$4,077/month but builds equity in a more expensive (and tax-free, as your home) asset.
For reference, True Loan's engine puts a standard $600,000 loan at 6% over 30 years at about $3,597/month, and the figures above scale from that to the loan sizes shown. The rentvesting case wins on cash flow here, but the owner-occupier saves ~$22k in stamp duty, and any capital gain on a main residence is generally CGT-exempt whereas the investment property is not. Which "wins" depends on growth rates, rents and how long you hold, which is exactly what a side-by-side comparison is for.
Model this in True Loan
Use the free, no-login calculator at trueloan.app to build both sides, then compare them at trueloan.app/compare:
- Scenario A — buy your home. Set the price ($800,000), your deposit, rate and term. In Upfront costs, pick your state and tick first-home-buyer to see the duty concession and total funds at settlement.
- Scenario B — the investment. Set the price ($600,000) and deposit. Leave first-home-buyer off so duty is the full investor rate, and add land tax and property management under ongoing costs.
- Set a projected property growth rate on each to watch equity, debt and LVR diverge over time.
- If you'd park savings against the loan, use the dedicated Offset balance input; if you'd tip in surplus rent each month, use the separate Extra repayment ($/month) input. They model different things (see offset vs extra repayments).
Every scenario is shareable via URL, so you can save both and revisit.
Common questions and mistakes
Does rentvesting count as my first home? It can affect eligibility for first-home schemes, since the First Home Guarantee and FHSS require you to buy a home to live in. Buying an investment first may forfeit those benefits, so confirm with the official rules.
Do I still pay stamp duty? Yes, at the full investor rate with no first-home concession. It's often the biggest hidden cost of rentvesting.
Is the rent I receive taxable? Yes, but you can deduct expenses like interest, land tax and management fees. Losses may reduce your taxable income (negative gearing).
Common mistake: comparing only the loan repayment. The honest comparison adds the rent you pay, subtracts the rent you receive, and counts stamp duty, land tax and the lost main-residence CGT exemption.
Figures here are estimates for the 2025-26 financial year and depend on your rate, location, rent and tax position. This is general information, not financial or credit advice — check official sources such as Moneysmart, the ATO and your state revenue office before deciding.
This guide is general information and estimates only — not financial or credit advice. Figures vary by lender and circumstances; always confirm with official sources.