Rentvesting Calculator

Rentvesting means renting where you want to live (typically an expensive city) while buying an investment property in a more affordable, high-yield location. The investment property generates rental income that offsets or exceeds your mortgage, while you still build equity and exposure to property price growth.

Rentvesting can work well when the gap between rental costs and mortgage costs is large, typically in cities like Sydney and Melbourne where a comparable PPOR mortgage would be 50-100% more than the rent you pay. If a high-yield investment property (4%+ gross yield) generates near-neutral cashflow, rentvesting lets you enter the property market without the lifestyle compromise of living somewhere affordable.

Investment property mortgage interest is tax-deductible (negative gearing), which can reduce your taxable income significantly. You also claim depreciation on the building and fixtures. The downside: when you sell the investment property, you pay capital gains tax (CGT), though the 50% CGT discount applies if you hold for 12+ months. Your PPOR is CGT-exempt on sale.

At 6.25% interest rates and 20% deposit, a gross yield of around 5% typically produces near-neutral cashflow (accounting for property management, maintenance, and rates). Below 4% gross yield, expect to top up $300-600/week from salary. Use this calculator to find the crossover point for your specific numbers.