What is rentvesting and does it work in Australia?

The mechanic: instead of buying a $1.2M home in inner Sydney, you rent that same home for ~$900/week and use the deposit + serviceability you would have used on the home loan to buy a $600K investment property in Brisbane, Adelaide, or regional NSW. The IP earns rent + claims investment-deductibles + builds capital growth; you keep lifestyle in the high-cost city.

Trade-offs: you lose the main-residence CGT exemption on growth (the IP attracts CGT at sale, owner-occupier home wouldn't); you don't get the FHB stamp-duty concessions in most states (those generally require owner-occupy intent within 12 months); and you build equity slower because you're paying someone else's rent + landlord's mortgage simultaneously.

When it works: high-rent metro renters whose rent-to-buy ratio exceeds 5% (Sydney inner-ring, Melbourne inner) where buying the home you rent costs 60-80% more annually than renting it. Pair with a high-yield IP location (5%+ gross) to keep cashflow positive while capital growth compounds.

When it doesn't: lifestyle areas where rent-to-buy ratio is under 4% (Adelaide, Hobart, Perth, buying is close to renting on cashflow terms), or for buyers approaching retirement who need the CGT-free home growth more than IP exposure. Run the maths in `/tools/cashflow-projector` before committing, and check FHB-scheme eligibility you'd give up.