🎧 Episode 207: How Rentvesting Can Secure—or Sabotage—Your Financial Future

Rentvesting—it sounds like a smart way to get into the property market while keeping your lifestyle intact, doesn't it? But is it the right move for your long-term financial future? This week, we unpack what it takes to make rentvesting work and how to avoid falling into common traps that could cost you more than you bargained for. Joining us is David Johnston, Mortgage Strategist at Property Planning Australia, to help us break it all down.

We explore a hypothetical scenario where Kath, a first-time buyer, is trying to decide whether to buy a home to live in or an investment property while continuing to rent where she loves. Through this scenario, we unpack the hidden factors people often overlook—like borrowing capacity, government incentives, tax implications, and the risks of investing in markets that may not perform as well as expected. It's about more than just numbers; it's about having a plan that aligns with your lifestyle and future goals.

David shares why forward planning is key, including structuring your loan in a way that keeps your options open down the track. Then, we also explore the trade-offs between high-yield and high-growth properties and why asset selection is critical if you want to avoid the pitfalls that catch so many first-time buyers out.

If you're considering rentvesting as a way to get ahead, this episode is for you. We unpack how to take a long-term view, weigh up your options, and make smart decisions that will set you up for success—not just now but for years to come. It's all about being strategic and confident in your choices.

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Episode Highlights:

00:00 - Introduction
02:13 - Our guest for today – David Johnston
03:27 - To set the scene: should Kath buy a home to live in or an investment property?
06:37 - Does borrowing capacity differ when buying an investment property vs a home to live in?
07:52 - Short-term considerations when choosing between a home and an investment property
11:03 - Do interest rates have an impact on the choice between buying a home or investing?
14:09 - Challenges of rentvestors buying properties outside their state
25:21 - What needs to go right for rentvestors to afford their dream home later?
28:43 - Why does borrowing capacity go down when interest rates go up?
31:58 - Is it risky to buy a cheap property for rental income while saving for a home?
34:55 - What are the risks and benefits of renting out rooms in your owner-occupied property?
37:20 - What happens if you become an accidental investor by buying in an unfamiliar area?
45:14 - One thing David knows now that he wishes he knew as a first home buyer

About Our Guest:

➼ David Johnston is the founder of Property Planning Australia, a firm dedicated to providing independent property and mortgage strategy advice. With a focus on helping families build wealth and security, David believes in the power of property as both a home and a financial asset. His approach centers on unbiased, client-focused advice, free from conflicts of selling investment products. David is also the author of How to Succeed with Property to Create Your Ideal Lifestyle and Property for Life – Using Property to Plan Your Financial Future, both published by Wiley.

Connect with David Johnston:

➼ Website https://propertyplanning.com.au/
➼ LinkedIn https://au.linkedin.com/in/david-johnston-8534871
➼ The Property Trio Podcast https://www.propertytrio.com.au/

Resources mentioned in this episode:

➼ Your First Home Buyer Guide Podcast Episode #9: What is the Importance of a Borrowing Strategy? https://homebuyeracademy.com.au/podcasts/009

Resources:

➼ FREE MINI COURSE: How to price property like a professional https://www.homebuyeracademy.com.au/freecourse

➼ Meet our recommended mortgage brokers at Home Buyer Academy https://homebuyeracademy.com.au/brokers

➼ Visit our website https://www.homebuyeracademy.com.au/

➼ Join our Facebook Group to get access to free monthly live Q&A sessions
https://www.facebook.com/groups/yourfirsthomebuyerguideaustralia

➼ Learn how to buy property without making a mistake with our ultimate 10-step online course for first time home buyers https://homebuyeracademy.com.au/YFHBG

If you enjoyed today's podcast, don't forget to subscribe, rate, and share the show! There's more to come, so we hope to have you along with us on this journey!

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Co-Founders

Veronica Morgan & Meighan Wells

Veronica & Meighan are both licensed real estate agents who exclusively help buyers. Together they have nearly 40 years experience as property professionals.

Veronica is principal of Sydney based Good Deeds Property Buyers and is also co-host of The Elephant in the Room property podcast as well as Location Location Location Australia on Foxtel and author of Auction Ready: how to buy property at auction even though you're scared s#!tless!

Meighan is the multi award winning principal of Brisbane based Property Pursuit, chairperson of the REIQ Buyers Agent Chapter & a regular media commentator.