Why Millennials are rentvesting

Property investing has long been associated with the Baby Boomer generation, however new data through the Australian Bureau of Statistics (ABS) is suggesting that another generation is starting to make their way into the investment market.

Millennials – those born between 1981 and 1996 – comprised 46 per cent of new property investors with Commonwealth Bank in 2023.

This number is suggested to increase. In February this year, the ABS reported a 21.5 per cent increase in new investor loans compared to February 2023, and it was Millennials that were leading the charge.

By rentvesting, Millennials can buy in less expensive outer locations while they rent close in the city for the lifestyle they want.

Millennials are aware of the importance of getting into the property market as soon as possible to secure their financial future. With property prices exceeding wages, rentvesting is sometimes seen as the only viable path towards home ownership. It also has the added bonus of maximising lifestyle.

A young person might work in the city and love the lifestyle, but find it near impossible to save a deposit needed to buy where they want to be in the city.

Therefore, they are buying where it’s affordable and can get a good rental return on their property investment.

Some things to consider with rentvesting is that you may lose full capital gains tax exemption; you may be ineligible for grants; your lease may not be renewed, property might be sold or a rent increase.ing pays the windfall gains tax.

If you have a young millennial that is looking rentvesting and need a conveyancer to assist with the purchasing processing, Walsh Conveyancing would be happy to guide them through the conveyancing process.

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