Rentvest, or buy the place I live in?

Bayley Clarke · Mortgage broker on the road · Last checked 12 November 2026 · 8 min read

The short answer

Rentvesting means you rent where you want to live and buy where you can afford. Buying a home means you live in what you buy. Both can work. The catch is that buying an investment first generally costs you your first home buyer benefits, and that has to be a deliberate trade.

So the decision comes down to two numbers. What the first home buyer benefits are worth to you, and what getting into the market sooner might be worth instead. Then a third: can you carry your rent and the investment's shortfall each month, comfortably, for years?

Rentvesting vs buying a home: how each works

With rentvesting, you keep renting near work, mates or the beach, and buy an investment somewhere the numbers stack up, often a more affordable market with solid rent. You get exposure to property as an asset without giving up the place you live. The plan for most rentvestors is that first investment, then the next one: Rentvesting: buy the investment first and keep renting. Does it work?

Buying a home means you live in it. Your rent stops, a mortgage starts, and you get access to the first home buyer support aimed at owner-occupiers. The trade is that you buy where you can afford to live, which might not be where you want to be. For a lot of people that first home is a stepping stone rather than the forever home, and that's fine: Can my first home be something cheaper, like a unit, instead of holding out for my forever home?

Want to see both paths on your numbers?

Book a call and I'll run rentvesting and buying a home side by side: what you can borrow each way, the monthly cost, and what you'd give up.

Book a 30 minute call Call 0437 189 939

No application, no credit check, nothing on your file. Just the numbers.

If I buy an investment first, do I lose first home buyer benefits?

Generally, yes. The benefits are for a first home, and an investment property isn't one. The 5% Deposit Scheme is the clearest example. To use it, you can't have owned property in Australia in the 10 years before your loan date, and that includes an investment you never lived in. The state stamp duty concessions and grants have their own rules, and what counts as a previous property varies by state, so check yours before you buy: If I buy an investment property first, do I lose my first home buyer benefits?

For a lot of people it's still the right call. If paying stamp duty gets you into the market three, four or five years sooner, that time in the market may be worth more than the concession you gave up. It may not, too. Growth isn't promised, and the benefits don't come back once they're gone. The full test of whether you still count is in Am I still a first home buyer?

Why the bank adds rent you don't pay: notional rent

If you live rent free with family and buy an investment, most lenders add a rent expense to your assessment anyway. It's called notional rent. The bank is assessing whether you can carry the loan for decades, and nobody lives in their parents' spare room forever: I live rent free with family. Why does the bank add a rent expense?

Two things worth knowing. It only applies when you're buying a property you won't live in. Buy a home to move into and the mortgage replaces it. And the amount isn't standard. Each lender picks its own figure, and a small number don't apply it at all, which can make a real difference to what a rentvestor living at home can borrow.

Buy, live in it, then rent it out?

There's a middle path: buy a home, live in it to meet the first home buyer rules, then move out and rent it. It can work, but there are two separate sets of rules and you need to meet both. State stamp duty concessions generally require you to move in and live there for a set period, and move out early and you can be asked to pay the duty back. Your state sets how long: Do I have to live in my first home, or can I rent it out?

The 5% Deposit Scheme is stricter. You have to keep living there as an owner-occupier for as long as the guarantee is on your loan, and renting it out isn't allowed during that time. The guarantee comes off once your scheduled repayments bring the loan to 80% of the property's value when you bought, or you refinance out. Stop living there early and your lender may charge lenders mortgage insurance or other costs. That can take years, not 12 months: Is it worth living in the property first to get the stamp duty exemption?

If you already own a home and want to keep it as a rental when you move, that's a different set of questions, covered in Can I keep my home as a rental when I move out?

Running the numbers both ways

Put both options as a monthly figure. For rentvesting: the rent you pay, plus the investment's shortfall after rent comes in, against what you pay now. You're buying without the scheme, so that's a 20% deposit to avoid lenders mortgage insurance, or a smaller deposit with it on top. For buying a home: the repayment, rates and running costs, less the rent you stop paying, with the scheme or concessions if you qualify.

Then add what each costs to get in: stamp duty, or none. And be honest about lifestyle, because the plan only works if you can live with it for years. The bank will assess your rent as an expense, the investment loan as a debt, and shade the rental income before counting it. If that combined picture doesn't service comfortably, the strategy doesn't work no matter how good the investment looks. The deposit side of the home option is in Help to Buy or the 5% scheme: which one fits?

The honest part

Rentvesting is a strategy, not a shortcut. It works when the investment is sound, the monthly numbers are comfortable and you're genuinely happy renting for years. Buying a home works when you can live where you can afford. Neither is the smart one by default. The wrong move is picking one without running both.

Decide before you buy, not after

Tell me where you rent, what you earn and what you've saved. I'll lay out both paths, the benefits on the table and what each one costs per month and per week.

Book a 30 minute call Call 0437 189 939

No application, no credit check, nothing on your file. Just the numbers.

Common questions about rentvesting vs buying a home

Is rentvesting a good idea for first home buyers?+

It can be, especially if you can't afford to buy where you want to live. The trade is that buying an investment first generally means giving up first home buyer benefits like the 5% Deposit Scheme. Run both options as a monthly number before deciding.

Do I lose first home buyer benefits if I buy an investment property first?+

Generally, yes. The 5% Deposit Scheme requires that you haven't owned property in Australia in the previous 10 years, investment property included. State stamp duty concessions and grants have their own rules, so check your state.

Can I rent out my first home if I bought it with the 5% Deposit Scheme?+

Not while the guarantee is on your loan. You need to keep living there as an owner-occupier until the guarantee ends, usually when scheduled repayments bring the loan to 80% of the value at purchase, or you refinance out.

What is notional rent?+

It's a rent expense some lenders add to your assessment when you live rent free and buy a property you won't live in. It only applies to investment purchases, and the amount varies by lender, with a few not applying it at all.

Is it better to rentvest or buy a home to live in?+

Neither is better by default. Rentvesting suits people who want to live somewhere they can't afford to buy and are comfortable renting long term. Buying a home suits people who can live where they can afford and want the first home buyer support.

Next question

Am I still a first home buyer?

What counts as owning before, for the scheme and for your state, before you decide.