Buying your first home used to be simple. You saved up, bought a house, and spent the next 30 years paying it off while slowly becoming your parents. But property prices have other plans.
For a lot of would-be buyers, the choice is either:
a) Buy a home you can afford and spend three hours commuting from the middle of nowhere.
b) Keep renting where you actually want to live but feel like you’re “throwing money away.”
But what if there was a third option? A way to get on the property ladder without sacrificing your lifestyle? That’s where rentvesting comes in.
What is Rentvesting?
Rentvesting is when you rent where you want to live but buy an investment property somewhere more affordable. Instead of stretching your budget to the absolute limit just to live in your own home, you buy somewhere with better investment potential while keeping the flexibility of renting.
Let’s say you love city life in central Auckland – the cafés, the nightlife, the fact that you don’t need a car. But buying there? That’s a whole different (expensive) story. With rentvesting, you keep renting your dream location but invest in a property somewhere that actually makes financial sense—somewhere with solid growth potential, good rental returns, and fewer bidding wars against seasoned investors.
And the best part? The rent from your investment property helps pay off your mortgage. So while you’re sipping your flat white in Ponsonby, your tenants are helping you build wealth. This makes rentvesting one of the most popular options for first-time landlords.
Why is Rentvesting So Popular?
Besides the fact that house prices are borderline ridiculous in some places, rentvesting has a few major perks:
1. You Get the Best of Both Worlds
You get to live where you actually want to be without feeling trapped by a monster mortgage. Want to move cities? Switch to remote work? No problem—you’re not tied down. Meanwhile, your investment property is quietly doing its thing, gaining value.
2. You Don’t Need a Massive Deposit
Buying in an expensive city means needing a deposit that makes you question your life choices. But with rentvesting, you can buy in a more affordable market where the numbers actually work in your favour.
3. Your Money Works Smarter
Instead of sinking everything into an overpriced home, you’re putting your money where it will grow. Smart property investment is all about location, rental demand, and long-term potential—not just buying in a place because you like the vibe.
4. Tax Perks
There are potential tax benefits to owning an investment property, from deductible expenses to depreciation. Speak to a tax professional (or that one mate who’s always talking about his accountant) to find out what you can claim.
5. A Plan B If You Want to Buy a Home Later
Down the line, if you decide you actually do want to settle down and buy a home to live in, your investment property gives you options. Sell it and use the equity, or keep it as a passive income stream. Future You will thank you.
How to Do Rentvesting the Right Way
Thinking rentvesting might be your ticket onto the property ladder? Great. But let’s do this properly, so you don’t end up with a dud investment, a mountain of debt, and a headache that never ends. Here’s how to get it right from the start.
Step 1: Get Your Finances in Order
Before you even think about looking at properties, figure out what you can actually afford. That means:
- Talking to a mortgage broker (because online calculators can only tell you so much).
- Checking your borrowing power and how much deposit you’ll need.
- Understanding ongoing costs like rates, insurance, and maintenance, so you’re not caught off guard.
Step 2: Choose the Right Investment Property
This is where a lot of people go wrong. You’re not buying your dream home—you’re buying a property that works as an investment. It needs to tick the right boxes, not just “feel right.”
Look for:
- Strong rental demand – You don’t want to be scrambling to find tenants every few months.
- Good long-term growth potential – A cheap house in the middle of nowhere isn’t a bargain if nobody wants to live there.
- Low-maintenance properties – Unless you love DIY and spending weekends at Bunnings, avoid places that need constant work.
Here’s where to find the best investment suburbs.
Step 3: Make It Tenant-Ready
Buying a property is one thing. Making it livable and attractive to tenants is another. If you want good tenants, your property needs to be in decent shape.
That means:
- Fixing anything broken or dodgy before tenants move in.
- Freshening up the place with neutral colours and good lighting (nobody wants to rent a house that looks like a 70s time capsule).
- Making sure heating, insulation, and ventilation meet rental regulations.
Step 4: Hire a Property Manager (Unless You Love Late-Night Calls About Broken Pipes)
You might think, “I’ll manage it myself and save money.” That’s all well and good—until you’re getting a 2 am call about a leaking roof or chasing tenants for unpaid rent.
A good property manager:
- Finds and vets tenants properly.
- Handles maintenance and repairs, so you don’t have to.
- Makes sure rent is paid on time.
- Keeps you compliant with tenancy laws (which are always changing).
In short, a property manager saves you time, stress, and potentially a lot of money.
Step 5: Stay on Top of Your Investment
Property investing isn’t a “set and forget” situation. Markets shift, rental demand changes, and your financial goals might evolve. If you just leave things to run on autopilot, you might miss opportunities—or worse, end up with an underperforming investment.
Keep an eye on:
- Market trends – Are property values rising in your area, or is it time to reassess?
- Rental yields – If your rental income isn’t keeping up with costs, it might be time for a rent review.
- Opportunities to refinance or renovate – A small upgrade could increase your rental income significantly.
Is Rentvesting Your Best Move?
Rentvesting isn’t just a clever workaround for crazy house prices—it’s a strategic way to live where you want while building long-term wealth. Done right, it gives you flexibility, financial growth, and options down the track.
But, like any investment, it needs the right planning, the right property, and the right team behind you. A poorly chosen rental in a slow market? A nightmare. A property that’s mismanaged? Even worse. That’s where The Rent Shop comes in.
We find great tenants, handle the paperwork, deal with maintenance, and make sure your investment actually works for you—so you can focus on the bigger picture. Whether you’re just getting started or looking to optimise your portfolio, we’ve got the expertise to make rentvesting simple and stress-free.
Ready to make rentvesting work for you? Get in touch with The Rent Shop today.
