Is Rentvesting a good idea?

Renting where you want to live & buying where you can afford (or investing in other asset classes) is a realistic strategy. The advantages of this strategy are that generally you can rent for less than owning & when you do borrow money to invest the debt is tax deductible against your income.

The Risk

A huge risk factor to Rentvesting is that people are not disciplined. People often say they will rent & invest the leftover funds but then years go by without investing at all. If this sounds like you, I would recommend buying a home to live in.

The Reward

The advantage of owning an owner occupied home is that over time you pay off the mortgage, you build equity & eventually home becomes yours. Plus when you sell the home it’s capital gains tax free. Downsizing into a smaller home to free up cash is a common strategy for retirees.

*This blog offers general information and is not financial, legal, or tax advice. Consult a qualified advisor for personal guidance.