Why We’re Choosing Rental Properties Over Our Dream Home…For Now


There’s something deeply alluring about buying a Principal Place of Residence (PPOR) Рa sanctuary to call our own. But what if the seemingly bold move of postponing this purchase could actually fast-track our journey to retirement? Sounds counterintuitive, right? Yet, our financial path is taking this somewhat unconventional turn.

Why Buying a PPOR Might Slow Us Down

By focusing our resources on purchasing a PPOR, we tie up a significant chunk of our wealth in a non-income generating asset. With a considerable portion of our income funnelled into mortgage repayments, our ability to invest and build wealth takes a backseat. Additionally, the PPOR, while potentially appreciating over time, doesn’t provide the same liquidity or cash flow as an investment property.

The Rentvesting Path

As an alternative, we’ve chosen to walk the ‘rentvesting’ path. This entails renting our primary residence and investing in rental properties. It’s a strategic twist on the traditional homeownership dream, allowing us to live in our desired location without the financial burden of owning a PPOR.

Comparing the Financial Impact

Paying off a PPOR with our salary might give us a sense of security, but it’s a slower route to wealth accumulation. Instead, by buying investment properties, we’re growing our net worth more rapidly. Each property, with its rental income and potential capital growth, is a stepping stone towards our retirement goal.

Building A Growth-Focused Property Portfolio

By concentrating on investment properties known for their growth potential, we’re essentially laying the groundwork for our future PPOR purchase. The plan? Use the equity we’ve built or sell off some properties to fund our PPOR later down the line. Additionally, the steady rental income stream from our properties could boost our borrowing capacity when we’re ready to make that move.

Nurturing Delayed Gratification

We won’t deny it – delaying the purchase of our PPOR does require a good dose of patience. Here are some tips to help cope with this delayed gratification:

  1. Visualise Your Goals: Keep your retirement vision front and centre. It’s not just about the PPOR; it’s about financial freedom and retiring earlier.
  2. Appreciate the Flexibility: Renting allows you the flexibility to live where you choose, without the long-term commitment of a mortgage.
  3. Embrace Minimalism: Without a permanent home, you might find yourself living with less ‘stuff’, and you know what? That can be incredibly liberating.
  4. Stay Focused: Regularly review your investment strategy to ensure it aligns with your goals. Adjust as needed to keep yourself on track.

As we forge ahead on this unconventional path, we’re excited about the opportunities it presents. It’s not the traditional route, but for us, it’s the right one. Here’s to an earlier retirement, fueled by strategic investing and the power of delayed gratification.

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