Renvesting is renting for $600 per week a home where you want to live in Sydney or Melbourne and at the same time, investing in a rental property where it makes sense.
Instead of paying $1,000 pw in loan repayments to buy a $1 million apartment.
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You buy two for one – two rental houses / apartments at $500,000 each.
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You use the rent to cover the loan repayments - receive $1,000 pw in rent (2 x $500), and pay $1,000 pw in loan repayments (2 x $500).
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You save the surplus (because the properties pay for themselves) to build up a deposit to add properties to your portfolio.
Rent to own is renting for $850 per week a home where you want to live in Sydney or Melbourne and buying the property at the same time.
The rent you pay is $250 per week higher than the market rent, but instead of being ‘dead money’, the extra rent is credited to building up the deposit on the home.
The main advantage of rent to own is that you agree on the price for the home at the start, and you agree on how much deposit needs to be built up before you need to take out a bank loan to pay the price. You then calculate how long the rent to own is to continue until the deposit has been built up.
In the Australian Financial Review (19-20 August 2017) Jimmy Thompson in the Smart Investor section quotes me: “There is a clear demand for rent to own because potential owners can lock in the purchase price while setting aside money to pay for it”. The image (below) is the full article.
