Is It Better to RentVest or Buy? The Honest Comparison for Australians (2026)

You've been saving for years. You've got a decent deposit. And now you're standing at a crossroads.

Do you buy a home where you want to live—even if it means stretching yourself thin, compromising on location, or settling for something smaller than you'd like?

Or do you keep renting, invest in a property somewhere else, and build wealth on your own terms?

This isn't just a financial question. It's emotional, practical, and deeply personal. I've had this exact conversation with people just like you—Australians who earn good money but feel stuck between what "everyone says you should do" and what actually makes sense for their future.

So let's cut through the noise. In this article, I'm going to walk you through the real numbers, the hidden trade-offs, and a decision framework that helps you figure out which path is right for you—not your parents, not your friends, but you.

The short answer? It depends on your goals. But if wealth creation is your priority, rentvesting typically wins over 5-10+ years. If emotional security and putting down roots matter more, buying to live might be worth the financial trade-off.

Let me show you why.

Key Takeaways

• Rentvesting typically builds more wealth over 5-10+ years because you buy where growth fundamentals are strongest, not where you want to live
• Buying to live gives emotional security and stability but often means compromising on property quality, location, or over-leveraging
• Your decision should be based on your STARS alignment (Skills, Time, Assets, Risk tolerance, Situation)—not just what "feels right" or what worked for your parents' generation
• The wealth gap compounds over time: a $50K advantage in year 5 can become $200K+ by year 15 through equity recycling

The Honest Truth: Both Can Work (But One Usually Wins Financially)

Let me say this upfront: I'm not here to shame anyone who buys a home to live in. Homeownership has real benefits—stability, security, putting down roots, making a place truly yours.

But if your primary goal is wealth creation—building equity, creating options, achieving financial freedom—rentvesting almost always wins over a 5-10+ year timeframe.

Why? Because when you buy to live, your decision is constrained by emotion, lifestyle, and compromise. When you rentvest, you buy purely based on fundamentals: where the numbers work, where growth is most likely, where you can afford a better-quality asset.

Let's break down both paths honestly, without the property spruiker hype or the "homeownership dream" guilt.

Path 1: Buying to Live In (The Traditional Route)

What This Looks Like

You scrape together a 10-20% deposit (or use a 5% deposit scheme like the First Home Guarantee). You buy a property in or near the suburb where you want to live—close to work, friends, lifestyle.

But here's the reality for most first-home buyers in 2026:

In Sydney or Melbourne, that might mean:

• Buying 40-60km from the CBD
• Settling for a 2-bedroom apartment instead of a house
• Compromising on school zones, transport, or amenities
• Stretching your budget to the absolute limit

In Brisbane, Adelaide, or Perth, you get more for your money, but you're still choosing location based on where you want to live, not where the investment fundamentals are strongest.

The Financial Reality

When you buy to live, you're taking on:

• Principal-and-interest repayments (you're paying down the loan, which builds equity slowly)
• No rental income (the property costs you 100% out-of-pocket)
• No tax benefits (you can't claim interest, rates, or maintenance as deductions)
• Emotional attachment (you renovate for your taste, not for resale value)

Let's say you buy a $700K home in outer Melbourne with a 10% deposit ($70K). Your monthly costs might look like this:

• Loan repayment (6.5% interest, P&I): ~$4,200/month
• Council rates: ~$200/month
• Insurance, maintenance, strata (if applicable): ~$300/month

Total: ~$4,700/month out-of-pocket

You're not paying rent anymore, which saves you maybe $2,000-$2,500/month. But you're spending $4,700. Net cost: ~$2,200-$2,700/month to live in your own home.

Over 5 years, you'll pay down maybe $50K-$60K in principal. If the property grows at 5% per year (average long-term growth), that $700K home is now worth ~$893K. You've gained $193K in equity.

But: you've also paid $162K+ in interest over those 5 years, plus $18K in rates and maintenance. Your actual wealth gain (after costs) is more like $13K in real terms—plus the $50K in forced savings via principal repayments.

Not bad. But let's compare it to rentvesting.

Path 2: Rentvesting (The Strategic Wealth-Building Route)

What This Looks Like

You keep renting in the suburb you love (or close to it). Maybe you're paying $2,200/month for a great 2-bedroom apartment in the inner suburbs of Melbourne, 10 minutes from work, near all your favorite cafes and friends.

Meanwhile, you buy a $550K investment property in a growth suburb 45 minutes out—somewhere with strong household formation, infrastructure investment, and land value. Maybe it's a 3-bedroom house in Melton, Pakenham, or Werribee (or equivalent in other cities).

You choose the property based on fundamentals, not lifestyle. It's not where you'd want to live, but the numbers work.

The Financial Reality

When you rentvest, you're taking on:

• Interest-only repayments (maximizes cashflow, keeps more cash in your offset)
• Rental income (tenant pays most of your costs)
• Tax deductions (interest, rates, insurance, property management, depreciation—all claimable)
• Lower emotional attachment (you buy for numbers, not feelings)

Let's say you buy that $550K property with a 10% deposit ($55K). Your monthly costs might look like this:

• Loan repayment (6.5% interest, interest-only): ~$2,977/month
• Rental income (at $450/week): ~$1,950/month
• Council rates, insurance, strata: ~$250/month
• Property management (7% of rent): ~$137/month
• Maintenance budget (1% of property value/year): ~$458/month

Total cost after rent: ~$1,872/month out-of-pocket (before tax)

But here's where it gets better: you can claim all the interest, rates, insurance, and management fees as tax deductions. If you're on a $100K+ income (37% tax bracket), you'll get back roughly $700-$900/month in tax savings.

Net cost after tax: ~$1,000-$1,200/month

Plus, you're still paying $2,200/month in rent for your lifestyle apartment.

Total monthly cost: ~$3,200-$3,400/month (rent + investment property after tax)

The Side-by-Side Comparison (5 Years)

Let's put both scenarios side by side, assuming similar growth rates (5% per year):

At first glance, buying to live looks slightly better after 5 years—you've got more equity and you've paid down some debt.

But here's what the "buy to live" scenario misses:

1. You're locked into one property. You can't easily sell and upgrade without triggering capital gains tax and moving costs.
2. Your lifestyle is compromised. You're living 45km from the city when you'd rather be closer.
3. You can't leverage equity as easily. Because you're living in the property, banks are more cautious about lending against it for a second purchase.

With rentvesting:

1. You live exactly where you want. Your lifestyle isn't compromised.
2. You can sell and upgrade anytime. Investment properties don't have the emotional friction of "but this is my home."
3. You can leverage equity sooner. After 2-3 years of growth, you can refinance and buy a second property—something much harder when you're owner-occupied.

The 10+ Year Outlook: Where the Wealth Gap Explodes

Here's where rentvesting really pulls ahead: equity recycling.

After 5 years, your rentvesting property has $152K in equity. You refinance, pull out $100K (keeping a safe LVR of 80%), and buy a second $550K property.

Now you own two properties, both growing at 5% per year. By year 10:

• Property 1: worth $896K (equity: ~$396K after loan)
• Property 2: worth $702K (equity: ~$202K after loan)

Total equity: ~$598K

Meanwhile, the "buy to live" person still owns one property worth $1.14 million with ~$440K in equity (after paying down some principal).

Wealth gap: $158K+ in favor of the rentvestor (and that's without even accounting for the lifestyle difference of living where you actually want to live).

By year 15-20, this gap can easily become $300K-$500K+ as the rentvestor continues to recycle equity and compound growth across multiple properties.

So, is it better to rentvest or buy? If your goal is maximum wealth creation and lifestyle flexibility, rentvesting typically wins. If your goal is emotional security and you've found an affordable property in a location you genuinely love, buying to live can work.

When Buying to Live Actually Makes More Sense

I'm not going to pretend rentvesting is right for everyone. Here are the situations where buying to live might be the smarter move:

1. You've found an affordable property in a location you genuinely want to stay in for 10+ years

If you can buy a quality home in a suburb you love without over-leveraging, and you plan to stay put for a decade or more—great. The emotional value of stability might outweigh the wealth difference.

2. You're using government schemes that heavily favor owner-occupiers

The First Home Guarantee, First Home Owner Grants, and stamp duty concessions are often only available (or much more generous) for owner-occupiers. If you're in regional areas or can access these benefits, the numbers might tip in favor of buying to live.

3. You have kids in school and need stability

Moving every few years disrupts kids' education and friendships. If you have school-aged children and you value stability over wealth maximization, buying to live might be worth the trade-off.

4. You're in a strong relationship and jointly buying

Two incomes make serviceability much easier. If you're buying with a partner and you're both committed to the location and lifestyle, buying to live can work well.

5. You have low rent and can buy a better property than what you're renting

If you're renting a mediocre place for cheap and you can afford to buy something significantly better in the same area, buying to live might genuinely upgrade your lifestyle without much financial compromise.

When Rentvesting Is Almost Always the Better Choice

Rentvesting tends to win when:

1. You're single or don't have kids yet

Flexibility is your superpower. Use it. Rent where you love, invest where it works.

2. You want to live in expensive inner-city suburbs

If you love living in Newtown, St Kilda, New Farm, or Subiaco—but you can't afford to buy there—rentvesting lets you have your lifestyle and build wealth.

3. You're career-focused and might relocate

If there's a chance you'll move cities for work in the next 5 years, buying to live locks you in. Rentvesting keeps you flexible.

4. You value wealth creation over homeownership

If your goal is financial freedom, not just "owning a home," rentvesting gives you more leverage, more options, and faster compounding.

5. You're skeptical of the "property ladder" myth

The idea that you have to buy somewhere (anywhere!) just to "get on the ladder" has trapped millions of Australians in bad investments. If you'd rather wait, learn, and buy strategically—rentvesting is your path.

The Decision Framework: How to Choose What's Right for You

Still not sure which path is right? Here's a simple decision framework:

Step 1: Define your primary goal

• Goal = Wealth creation + flexibility → Lean toward rentvesting
• Goal = Stability + emotional security → Lean toward buying to live

Step 2: Assess your STARS alignment

[INSERT TABLE 2 HERE - STARS Assessment]

Step 3: Run the numbers Use our free RentVestor Calculator to model both scenarios with your real numbers:

• What does buying to live cost you monthly?
• What does rentvesting cost you monthly (after tax)?
• What's the 5-year and 10+ year wealth projection for each?

Step 4: Check your gut Numbers matter, but so does how you feel. If buying to live gives you genuine peace of mind and stability (not just FOMO or social pressure), that has value. But if you're only buying because "that's what you're supposed to do," pause and reconsider.

The Hidden Costs Most People Ignore

Whichever path you choose, factor in these often-overlooked costs:

Buying to Live:

• Opportunity cost of lifestyle: Living 50km from the city to afford a home might save you $500K, but it costs you 2 hours/day in commuting. Over 10 years, that's 5,000 hours—or 208 full days—of your life.
• Renovation trap: You'll be tempted to renovate "your home" based on personal taste, not market value. That $80K kitchen reno might only add $40K to resale value.
• Selling friction: When you eventually want to upgrade, you'll face agent fees (2-3%), moving costs, emotional attachment, and potential capital gains tax if you've rented it out.

Rentvesting:

• Rental instability: Landlords can increase rent, sell the property, or not renew your lease. You need to budget for potential moves every 1-3 years.
• Two sets of moving costs: If you buy and then decide you hate being a landlord, selling an investment property has costs (agent fees, legal, CGT if held under 12 months).
• Delayed gratification: You won't feel like you "own" anything for years. Psychologically, this is harder for some people.

Real-World Example: Sarah's Story

Let me tell you about Sarah (name changed), a 34-year-old marketing manager in Sydney earning $115K.

In 2021, Sarah was torn. She'd saved $90K and was being told by everyone—parents, friends, colleagues—that she needed to buy a home.

The problem? To buy anywhere near the city, she'd have to spend $850K+ on a tiny 2-bedroom apartment in an older building with high strata fees. Or she could buy a 3-bedroom house in Campbelltown (65km from the CBD) for $650K.

Neither felt right. She loved living in Newtown, walking to work, being close to friends.

So she chose to rentvest. She kept her $2,400/month rental in Newtown and bought a $580K house in Wollongong (investment property).

Five years later (2026):

• Her Wollongong property is worth $765K (equity: ~$243K after loan costs)
• She's claimed $52K in tax deductions
• She still lives in Newtown and loves her life
• She's now refinancing to buy her second investment property

Meanwhile, her friend Emma bought that $650K house in Campbelltown. Emma's property is now worth $823K (equity: ~$235K), but she spends 14 hours/week commuting and regrets the lifestyle trade-off.

Sarah has similar equity, plus she kept the lifestyle she wanted. And she's positioned to buy property #2, while Emma is stuck in one property and emotionally attached to it.

That's the power of choosing the right path for your situation.

Common Objections (And My Honest Answers)

"But I'm throwing money away on rent!"

No, you're not. Rent buys you flexibility, lifestyle, and freedom. When you buy to live, you "throw away" money on interest (which is often more than rent), plus rates, strata, and maintenance. The "rent money is dead money" myth needs to die.

"What if I want to move into my investment property later?"

You can. Once you've built equity and the property has grown, you can sell your investment, use the gains to upgrade, and move in. Or you can buy a second property to live in and keep the first as an investment. Rentvesting doesn't lock you out of homeownership—it just delays it until you can afford something better.

"My parents bought a home young and it worked for them."

Your parents bought in a different era. In the 1980s-90s, median house prices were 3-4x median income. Today, they're 8-12x median income in major cities. The game has changed. What worked for them doesn't work the same way now.

"I want my kids to grow up in our own home."

That's a valid emotional reason. But consider this: would your kids rather grow up in a modest home you can barely afford, or in a great rental with less financial stress—while you build wealth that funds their education, opportunities, and eventual inheritance?

There's no "right" answer, but don't let guilt make the decision for you.

Frequently Asked Questions

Q: Is it better to rentvest or buy?

A: It depends on your primary goal. If wealth creation and lifestyle flexibility are your priorities, rentvesting typically wins over 5-10+ years. If emotional security and stability matter more, and you've found an affordable property you love, buying to live can work. Use the STARS framework and run the numbers to decide.

Q: Can I rentvest and still use the First Home Guarantee?

A: No. The First Home Guarantee and most first-home buyer schemes require you to live in the property. However, you can use these schemes later—after you've built equity through rentvesting, you might be in a better position to buy a home you actually want.

Q: What if my investment property doesn't grow?

A: This is why suburb research and fundamentals matter. No property is guaranteed to grow, but buying in areas with strong household formation, infrastructure, and employment diversity dramatically increases your odds over 5-10+ years. And if you've stress-tested your cashflow, even flat growth doesn't hurt you—you're just holding until the market improves.

Q: Do I pay capital gains tax when I sell my investment property?

A: Yes, but only on the profit (and you get a 50% CGT discount if you hold for 12+ months). If you buy to live and later convert to an investment, you'll face CGT on the growth after you move out. Either way, CGT is a "good problem"—it means you've made money.

Q: How long should I rentvest before buying a home?

A: There's no fixed timeline. Some people rentvest for 5 years, build equity, then buy a home. Others rentvest indefinitely and build a portfolio of 3-5 investment properties. It depends on your goals and situation.

Q: What if interest rates keep rising?

A: This is why you stress-test before you buy. If a 1-2% rate rise would break your budget, don't buy yet—whether RentVesting or buying to live. Build a bigger buffer first.

Q: Is RentVesting just for high-income earners?

A: It helps to have strong income (makes serviceability easier), but plenty of people on $80K-$100K successfully rentvest. The key is choosing a property with strong cashflow and keeping your rent affordable.

Your Next Step: Model Your Own Scenario

Look, I've given you the theory, the numbers, and the framework. But the only way to really know which path is right for you is to model it with your own situation.

Here's what I recommend:

Step 1: Try our free RentVestor Calculator. Plug in your income, deposit, the type of property you'd buy to live in vs. the type you'd buy as an investment, and see the 5-year and 10+ year projections side by side.

👉 Try the RentVestor Calculator (FREE)

Step 2: If you're leaning toward RentVesting but you're not sure where to start, book a free 30-minute Gameplan Session with me. We'll look at your numbers, talk through your goals, and map out a realistic first step.

👉 Book a Free Gameplan Session

Step 3: If you want the full system—how to research suburbs, analyze deals, stress-test properties, and execute with confidence—check out the RentVestor Academy. It's the 12-month program I built to help high-income Australians do exactly what Sarah did: keep the lifestyle, build the wealth.

Final Thought

Here's the truth: there's no universally "right" answer to whether it's better to rentvest or buy.

For some people, buying to live is the right move. For others, rentvesting is clearly superior.

What matters is that you make the decision based on your goals, your numbers, and your situation—not based on what your parents did, what your friends are doing, or what some random property spruiker told you.

You've got one financial life. Make sure the biggest purchase you ever make is based on evidence, not emotion.

About the Author

Luke Jenner, Head Coach at RentVestor Academy and founder of the RentVestor Revolution. After 10+ years investing in property while renting, Luke helps high-income Australians break free from the "buy where you live" trap and build wealth through evidence-based RentVesting. No commissions. No kickbacks. Just honest education.