Young people on the Northern Beaches will struggle to afford to buy property here despite growing up on the peninsula.
Soaring property values in this sought after area mean the next generation is quite simply being priced out of their childhood playground.
LJ Hooker tells COVERED. about the trend for people to own property in one area while they rent and live in another – the Rentvestor®.
LJ Hooker says a Rentvestor® is defined as someone currently living, as a tenant, in a rented property but who is also a landlord of a property that they own and rent out.
Meaning, if you cannot afford to buy in Freshwater then buy in the Central Coast and rent that out while you live and rent on the Northern Beaches.
LJ Hooker says it’s a case of people choosing lifestyle over location and living where they want but cannot afford to buy.
In White Paper ‘The New Australian Dream’, LJ Hooker identified the Rentvestor® as a “young couple in their late 20’s or early 30’s who love their lifestyle and don’t want to relocate from where they are renting.
“The problem is that they can’t afford to buy in the area. Rather than disrupt their lifestyle, they tend to buy property, either closer to where they grew up or in a more affordable part of the city, that has been identified as a growing area,” states the recent White Paper.
Their research shows that there are two clear types of Rentvestor:
1. Those driven by lifestyle choices and affordability constraints.
2. Those driven by work, study or other personal circumstances.
WHY CHOOSE RENTVESTING
A total of 43% of Rentvestors become a Rentvestor due to work or study. This group owns an investment property a considerable distance from where they currently rent and reside.
The survey show that 38% of this group own a property in another state and 20% own a property more than 100 kilometres away from where they live but within the same state.
Affordability is also a key with 26% of respondents stating that they are Rentvestors because it’s too expensive to buy where they want to live.
Generally, this group would be renting in the inner city locations and tend to look to other capital cities to invest in with 29% of this group owning an investment property in another state.
Rentvestors that purchase an investment property closer to where they rent have done so as an investment strategy. In total, 31% of respondents to our survey are Rentvestors because they see it form part of their investment choices. This saw 77% of those who Rentvest for capital growth, owning a property between 5 and 20 kilometres from where the rent.
ON THE UP AND UP
The number of Rentvestors looks likely to grow.
Rent increases remain manageable while strong price growth especially in city and popular areas, means people are less likely to afford to buy where they want to live.
Also, the increasing mobility of the workforce will see Rentvestor numbers rise.
For more information on Rentvestor® please contact:
Michelle Bourne - LJ Hooker Manly - 02 8240 3200
Christian Ryals - LJ Hooker Dee Why - 02 9971 2877
Or visit: www.ljhooker.com.au/myljhooker/theevolution-of-the-rentvestor