Why rentvesting is like a game of Monopoly

June 3, 2017


By Nicola McDougall

Why rentvesting is like a game of Monopoly
Posted on Saturday, June 3rd, 2017

Rentvesting is all about investing in the Monopoly green houses so you can rent the red hotel-like ones, according to one of Australia’s most well-known proponents of the investment strategy.

While rentvesting has become more popular over recent years due to affordability considerations, Your Empire’s Chris Gray has been doing it for more than 15 years.

The Sydney-based buyer’s agent says he learned about rentvesting way back when after seeing one of his clients adopt it while when they built a multimillion-dollar home around the corner.

“I had more and more clients do the same thing… and the numbers just said it wasn’t worth buying it,” he says.

“So I just learnt that and I ended up renting a $1.5 million place in Gordon’s Bay/Clovelly and I was paying $620 a week, which is like a two per cent yield.

“Rentvesting has formed an integral part of my personal property investment strategy for many years. I’ve not lived in my own home for the past 15 years and don’t see myself doing so in the foreseeable future – the financial and lifestyle benefits I’ve gained through rentvesting are too great.”

One of the keys to successful rentvesting, however, is you have to invest the equivalent into either property, shares or business, Chris says.

Another aspect that many rentvesters need to get their head around is the “fear” of having to move more frequently.

But that’s an easy one to overcome, Chris says, because you just need to change your mind-set.

“We moved every year for the first five years. The way we got around it, rather than go in for a year and dread that you’re going to get kicked out, you go in assuming you’re going to get kicked out,” he says.

“You say, ‘right this is a one-year plan’ so you don’t regret it. If you then decide to extend, then it’s a bonus and it’s a positive feeling.

“If then you do get kicked out, if each time you move to a better place, again, it’s a positive feeling because you’re going to somewhere new and it’s going to be better than the last place.”

Chris has been rentvesting for so long now that he doubts it will ever change.

For one, he has no desire to live in the same place for the long-term and he and his wife would rather go on a holiday than spend money on a new kitchen.

He’s lived in his current rental property for some six years and has thought about shifting somewhere new but, again, it’s all about the numbers.

“We’re dying to move out but the rent is so cheap we can’t do it,” he says.

“It’s worth $4 million. It’s a completely round apartment and you get the whole floor, so you get 360-degree views around Sydney and Darling Point.

“We just think we can’t move out. It’s like someone has given you a gift. You can’t throw it away.”

While Chris has been an advocate of rentvesting for years, he recognises that more and more would-be property owners need to adopt the strategy to get a start in the game.

For first homebuyers especially, he says prices will probably increase quicker than they can save a deposit, so it makes sense to enter the market somewhere affordable while renting elsewhere.

As with any investment, it’s important to concentrate on the numbers and remove emotion out of your decision, he says, because an emotional focus prevents many people from seeing the long-term financial benefits of rentvesting.

“If you’re thinking about rentvesting, my advice to you is to give it a go – it could give you the lifestyle you’ve always dreamt of, while setting you up for a profitable future,” he says.

“All the sceptics can pick holes in it, but that’s because they’re sceptics with a negative mindset. If you’re got a positive mindset, you can make it work.

“For some people, it’s the only opportunity if you don’t want to live in the wild west. If you want to be in the closer suburbs and closer to work, it’s your only choice. But rather than think of it as a negative, think of it as a positive.”


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