Working towards buying your first home is an exciting and scary time. Saving for a deposit, getting your finance approved so you know how much you can borrow then getting out and about looking at properties - all takes a lot of time and energy.

What you should also think about is whether you should be buying a home to live in or an investment property.

So what is rentvesting?

It is when you choose to buy an investment property and rent the home you live in. For many first time buyers it is an economically rewarding strategy, as long as the structure is set up correctly and the right property is purchased.

Do you aspire to work in other cities or even overseas?

When I purchased my first home at age 23, I really didn't think too far ahead. I was just so determined to stop renting and buy something that I could do up and make it my own. I certainly didn't consider the possibility that I might end up working in another state or that I might meet someone and want to start a family. But less than a year after I bought that run-down-renovator with loads of 'potential', I was off to Melbourne with a company transfer. That house was not in any sort of condition to rent out and I was forced to sell it for a lot less than I could have achieved had I purchased an investment grade property in rentable condition. Had I known then what I know now I would have made a very different decision.

I am writing this with a post-Covid19 mindset. Imagine a time when we will once again be able to use our passports, freely roaming the planet unhindered.

If you are like many Aussies, you may have a yearning to live and work in another city or even another country. Maybe as a nurse in London, or an analyst in Hong Kong. An IT specialist in Silicon Valley or doing bar work as you make your way around Europe. If you are seeking to broaden your experience in different locations then buying your first home to live in probably isn't the most sensible decision.

Rentvesting allows you to get on the property ladder by starting your investment portfolio with your first property purchase.

Do you love where you live but can't afford to buy there?

If you love the location you currently live in but can't afford to buy there, then rentvesting may be the right strategy for you. Perhaps you are renting in your ideal suburb. Maybe the commute to work is short, or the local cafe scene is where you spend every weekend. Maybe the beach is your thing and right now you cannot afford to buy anything larger than a shoe box if you try to buy in the area. If you really value the lifestyle you have and aren't willing to compromise by moving to another area, buying a C-Grade property just to get on the ladder is not the answer.

Now is the time to be thinking seriously about what your future looks like post COVID-19 because we won't be stuck in isolation forever. This kind of decision involves a helicopter look at the 'big picture' so you should consider talking to a licensed financial advisor who understands property investment. But make sure you avoid one who is going to try to get you to buy an off-the-plan apartment at all costs!

Are you hoping to get married or expand your family in the next few years?

Where you are in the journey of life is going to impact on your decisions whether to buy a home to live in or an investment property. You may be single now but what if you meet someone and want to move in together? Will two people really live happily in that shoe box that was only just big enough for you on your own? What if you want to have children? If the property you buy as your first home is only suitable for you and your current lifestyle and you need to upgrade within the first few years, you are highly unlikely to see enough growth to cover your costs.

If you feel that you won't be able to afford a larger home in the foreseeable future, buying a property to live in for the short term and keep as a long term investment might be a sensible option. You'd then become a rentvestor when and if your circumstances change.

Rentvesting is a really good option to consider if you are not ready to settle into a home for at least 7+ years. With rentvesting you might qualify for some of the First Home Buyer concessions or grants in your state, as long as you live in the property for a defined period of time. If you choose this path, ultimately the decision about which property to buy should be one that is based on solid investment fundamentals - not your heart.