Is Rentvesting A Viable Option To Getting On The Property Ladder?

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The Taylors’ name has been synonymous with the real estate industry for over 90 years. As a leading provider of property management services in the Eastern Suburbs of Sydney, we spoke with Principal, Mark Taylor to gain his insights into the Sydney housing market and to find out more about Rentvesting.

There have been recent news reports about Sydney becoming a bit of a turn-off for investors due to sky-high pricing. Have you noticed this trend and are investors looking outside of Sydney?

Yes, we have not noticed this, however investors familiar with the Sydney market are still buying I believe because of 2 main reasons:

  1. Rental demand – the average vacancy rate across Sydney over the last 12 months ranges from 1.8% – 2.5%, a relatively low number. As Sydney is an economic hub and therefore an employment driver, demand for accommodation is consistent.
  2. Long term capital growth – Sydney real estate prices have increased on average by about 5.9% over the last 10 years. Due to the economic growth and increase in demand for housing, Sydney will continue to have long term capital growth.

What are the top  mistakes renters make when applying for a property?

There are a few common mistakes renters make which we feel are important for tenants to be aware of when applying for a property to make the process seamless and hassle free:

  • Not completing the online application form with all information requested – including photo identification, most recent rental ledger and bank statement – which creates delays in the application process.
  • Not being upfront on the application with regards to number of occupants, pets and smokers and thereby potentially ignoring the terms of the lease.
  • Applying with a late lease start date or ‘ASAP’ as a commencement date rather than the date advertised.
  • Not providing dates and lease length that actually suits the tenant but rather what they think we want to see.
  • Rushing the condition report and failing to document and photograph the apartment’s condition.
  • Signing a lease without properly reading it – tenants sometimes forget that a Residential Tenancy Lease Agreement is a legally binding contract enforceable by law and legislation and should be treated as such. It is important to read the lease fully and always ask any questions prior to signing it.

What do you predict to be the biggest property shift or trend in 2018?

Trends and markets are always changing, but I believe the following considerations should be taken into account in 2018:-

  • Consistent demand for property located in popular suburbs close to transport, facilities, shops and jobs.
  • Property in locations not consistent with the above will struggle to sell or lease and therefore values will be affected.
  • There will be an oversupply of units in some areas because of the massive building taking place and values will be affected.
  • Demand for houses and semis will remain very strong in the suburbs from the CBD to about 20km from the CBD
  • The Banks lending policies will constrain the market especially the first homeowners.

You can also refer to our most recent Quarterly Report for background to support this prediction: https://taylors.com.au/articles/quarterly-market-report-for-sydney-s-eastern-suburbs-investors-mar-2018

Rentvesting seems to be growing in popularity, particularly in Sydney where prices are high. What exactly is rentvesting and is it a viable option for Sydneysiders looking to get on the property ladder?

I’ve written a comprehensive article on rentvesting, explaining what it is, and how it could be the right path for you on our website: https://taylors.com.au/articles/could-rentvesting-be-the-right-path-for-you

Where are the hottest suburbs in Sydney right now?

The Eastern suburbs are always a hotly sought after location. It’s known as a blue-ribbon area for good reason. Check out the Taylors’ guide to the area here.

Principal Mark Taylor

Mark Taylor is the Principal of Taylors Property Management Specialists https://taylors.com.au/team/mark-taylor :