One of Australia’s biggest banks is seeing a surge in renters choosing to rent even when they buy a home, a hack that’s changing the game for people locked out of property markets.
NAB defines rentvesting as a strategy where “you buy an investment property in one location (often somewhere affordable or with high growth potential) while choosing to rent in a location that caters to your lifestyle needs.”
In practice, many clients are now prepared to buy in outer-ring or regional areas with strong rental demand while continuing to rent closer to work or lifestyle hubs. That can help them step onto the property ladder sooner in markets where buying an owner-occupied property remains out of reach.
Recent realestate.com.au analysis finds that about 5.4% of first-home buyer loan commitments are investor loans, closely matching a 5.5% share of first-home buyer searches signalling investment intent – clear evidence of a small but growing rentvestor cohort.
Nicole Butler (pictured), NAB local home loan expert, highlights classic rentvesting advantages: the ability to live where you want while building equity in a high‑growth area, potential tax deductions on investment loans, and rental income that can help support repayments over time. For some borrowers, that can make long-term homeownership more achievable than continuing to rent indefinitely.
At the same time, the strategy is highly sensitive to cash flow. NAB stresses the weight of upfront and ongoing costs – including stamp duty, maintenance, insurance, and property management fees – as well as exposure to interest rate movements and possible capital gains tax when the property is sold.
Butler also warns that “a property may not be tenanted every week of the year, and rental income is central to how rentvesting works”, underscoring the importance of allowing for vacancies in any serviceability assessment.
NAB notes that “rentvesting has become increasingly common, particularly among younger buyers priced out of inner-city markets or those prioritising flexibility.” For brokers, that means more clients whose “first home” is technically a rental investment.
See the NAB media release as well as The Courier Mail-realestate.com.au news for more information.
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
