The rise of the rentvestor: renters also becoming landlords
A burgeoning real estate trend has seen renters also become landlords while still living in investment properties themselves.
Savvy investors of all ages and demographics are quickly becoming a part of a growing trend dubbed by LJ Hooker as the Rentvestor™.
Since 2013, the real estate market has seen a level of change with renters buying other property as an investment strategy, seeing them become a landlord and renter simultaneously.
LJ Hooker Southport principal Alex McCormack said the evolving trend will encompass a broader geographic and demographic make-up driven by strong capital city growth, a more mobile and transit workforce and the preference for lifestyle over location.
“Interestingly when LJ Hooker first identified the rentvestor trend we described it 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 were renting’, however our latest research shows there are now two clear types,” Alex said.
“The first category being those who are driven by lifestyle choices and affordability constraints and the second category are driven by work, study or other personal circumstances."
He added that there has been an evolution of the rentvestor not only by age bracket but also by income.
In fact, LJ Hooker data found that 56 percent of rentvestors are now aged between 35 and 55 years, and 38 percent have a household income less than $100,000 per annum, while a total of 43 percent have become a rentvestor due to work or study.
“Contrary to common perceptions that this type of investor is a young professional or university student, our survey found that a diverse age group now rentvest and it’s fast becoming a common part of the Australian real estate market,” Alex said.
A number of key factors have been identified suggesting a substantial increase in the number of rentvestors.
Rental growth over the past year has remained soft, especially in most capital city markets, which has made renting a more attractive and affordable option, and rentvesting a budget friendly investment strategy.
The increased mobility of the Australian workforce is also predicted to push rentvestor numbers up, especially as the mining and resource sectors slow.
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