Should You Buy or Rent? The Smartest Strategy for Your Future

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Deciding whether to buy or rent is one of the biggest financial decisions you’ll make. Many people assume that buying is always the best option, but is that really the case? Rentvesting (where you rent where you want to live while investing in property elsewhere) has become an increasingly popular strategy for those looking to build wealth while maintaining lifestyle flexibility.

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Rentvesting: A Personal Experience

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For years, rentvesting has been a strategy that has worked well for many investors. You might assume that if you can afford to buy a home, you should, but what if that home isn't the one you truly want? Instead of settling for a property in a location that may not align with your lifestyle, rentvesting allows you to live where you prefer while investing in high-growth areas.

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Many homeowners get caught in financial traps, tying up all their savings in one property. Rentvesting gives you the freedom to control multiple assets, build long-term wealth, and take advantage of high-growth investment locations.

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Understand Your Numbers

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Imagine you decide to buy a $2 million home with a 10% deposit ($200,000). You’d also need to pay stamp duty (around $100,000) and other fees, bringing your total upfront cost to $305,000.

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With an interest-only loan of $1.8 million, at current rates, your mortgage repayments would be around $9,000 per month. Add insurance, council rates, water rates, and strata fees, and your total cost could reach $10,000 per month.

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Now, let’s look at the alternative—renting the same property.

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Initially, the rent may have been $1,200 per week ($5,200 per month), but even after increases to $1,320 per week ($5,720 per month), you’d still be saving nearly $4,000 per month compared to buying.

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Over a year, that’s close to $50,000 saved, which could instead be used for investing. Instead of locking all your money into one property, you’d have the flexibility to build a diversified portfolio of investment properties.

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Let’s Talk about Investing

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With $305,000 in savings, instead of using it as a deposit on one home, you could invest in multiple properties.

• Purchasing four properties valued at $450,000 each would give you a $1.8 million portfolio.
• If these properties grow at 10% annually, that’s an increase of $180,000 in year one and $360,000 over two years.
• Meanwhile, your rental income from these properties would likely increase over time, covering expenses and providing positive cash flow.

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By choosing rentvesting, you’re not only keeping your lifestyle options open, but you’re also leveraging your borrowing capacity to maximise returns across multiple properties instead of being locked into one.

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What’s the Right Move for You?

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The answer depends on your financial goals, risk tolerance, and lifestyle preferences. If stability and homeownership bring you peace of mind, buying may be the right choice. But if building wealth faster, maintaining lifestyle flexibility, and maximizing investment returns matter more to you, rentvesting could be your path to financial freedom.

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Instead of committing to a massive mortgage, you could build an income-generating property portfolio that allows you to eventually buy your dream home without sacrificing your financial future.

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If you’re serious about building wealth through property, consider rentvesting as a long-term strategy. By making smart investment choices today, you can put yourself in a position where buying your dream home later becomes a financial decision, not an emotional burden.

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Want to explore your best options? Book a FREE discovery call with the Search Property team today and take the first step toward a smarter property strategy!

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Retire Filthy Rich With Real Estate, where we share proven property investment strategies to help you build wealth faster is out now. If you want to learn more about how to achieve financial freedom through smart real estate investments, grab your copy today!