Rentvesting for Young professionals
Rentvesting for young professionals
The short answer
Young professionals often want to live in or near the city for work and lifestyle, where buying is expensive. Rentvesting lets them keep renting there while owning an investment where prices suit their budget. Many are in the 30% bracket. Whether it suits anyone depends on income stability, savings, plans and circumstances.
For a lot of young professionals in Sydney, Melbourne and Brisbane, buying where they live isn’t realistic yet. Renting there is. Rentvesting is the idea that you can do both: rent where life is, and own an investment where the numbers work. This page explains how it generally works for young professionals, as at 6 November 2026.
General information only. It doesn’t take your circumstances into account.
Why rentvesting appeals to young professionals
Lifestyle and location
Inner and middle-ring suburbs near CBDs are expensive to buy in. Rent is often more manageable. Many young professionals value the short commute, the social life and the flexibility more than owning where they live.
Career mobility
Early careers move. A new job across town, a transfer interstate, a stint overseas. Renting makes that easy. Owning an investment means you keep a foot in the market while you move.
Income growth
Many young professionals expect their income to rise. Some see an investment now as a starting point.
It’s widely discussed
A February 2025 Westpac survey found 54% of first home buyers were considering rentvesting, rising to 61% in NSW. Far fewer actually do it. PropTrack’s February 2026 analysis found around 5.5% of first home buyer searchers showed investment intent.
Income and tax rate
Many young professionals earn in the 30% bracket for 2026-27 ($45,001 to $135,000), plus 2% Medicare (ATO).
What young professionals commonly consider
- Savings and buffer. Often the tightest constraint early in a career.
- HECS-HELP. It affects take-home pay and how lenders assess serviceability.
- First home buyer benefits. Grants, stamp duty concessions and the 5% Deposit Scheme are generally for owner-occupiers. Buying an investment first can affect 5% Deposit Scheme eligibility for up to 10 years. See what you give up.
- Plans in the next five years. Partner, children, moving overseas, buying a home.
- New or established. Since 2026, this affects the tax treatment.
The example property at a $120,000 salary
The calculator above uses an example salary of $120,000, chosen for illustration. It isn’t an average for any profession.
At that salary the 2026-27 marginal rate is 30% plus Medicare. The calculator shows:
- Best case: the example property tenanted every week.
- Worst case: vacant every week, with any rental guarantee from the property management company paying the guaranteed rent for its term, typically three years.
Results are estimates after rent and estimated tax effects, excluding changes in value.
The 2026 tax changes in brief
- Established dwellings bought after 7:30pm AEST 12 May 2026: net losses quarantined from 1 July 2027.
- New residential dwellings remain eligible for negative gearing, subject to legislation before Parliament.
- Held before Budget night: grandfathered.
Sources: Pitcher Partners, Baker McKenzie. See is rentvesting dead?.
Work deductions
Work-related deductions depend on your job and the ATO’s rules. The ATO’s occupation and industry guides are the reference. They’re separate from investment property.
The risks
- Two housing costs. City rent is high, and the investment’s costs come on top.
- Life changes. A move overseas, a new relationship or a career break can change your plans and income.
- Values can fall. National values were 6.7% below the March 2026 peak in October 2026 (Cotality).
- Vacancy. National vacancy at a five-year high of 2.4%.
- Lost first home buyer benefits. Possibly for years.
- Rental guarantees end. Where offered, provided by the property management company for a fixed term, dependent on that company paying.
Questions to take to a tax agent and lender
Registered tax agent
- What’s my marginal rate including bonuses and salary sacrifice?
- How would an investment loss be treated, new versus established, under the 2026 changes?
Lender or broker
- How does my HECS-HELP debt affect my borrowing capacity?
- How do you treat bonuses and commission?
- Would I be assessed for 100% of the purchase price plus LMI? (Through licensed lending partners including Empower Money, ACL 561207, subject to eligibility and credit assessment.)
Join a webinar
To see how rentvesting works at a young professional’s income, with the best and worst case, join a free WPF GO webinar with Peter Khoury. General information only, not personal advice.
Rentvesting calculator
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Frequently asked questions
Why is rentvesting popular with young professionals?
Inner-city living is expensive to buy into but more affordable to rent. Young professionals often value being close to work and social life, and expect to move for career reasons. Rentvesting lets them keep that lifestyle while owning an investment elsewhere.
How common is rentvesting among first home buyers?
Westpac reported in February 2025 that 54% of first home buyers were considering rentvesting, and 61% in NSW. Actual activity is lower: PropTrack found around 5.5% of first home buyer searchers showed investment intent in February 2026.
What tax bracket is someone on $120,000 in?
On the 2026-27 rates, taxable income from $45,001 to $135,000 is taxed at 30%, plus the 2% Medicare levy. Bonuses, salary sacrifice and other income can change your taxable income.
Does HECS-HELP debt affect rentvesting?
HECS-HELP repayments are based on income and lenders generally factor them into serviceability. How much it affects your borrowing depends on the lender's policy and your income. A lender or broker can explain the effect.
Is rentvesting better than buying an apartment to live in?
Neither is better in general. Buying a home gives security and access to first home buyer benefits. Rentvesting gives location flexibility and an investment that may have tax deductions. It depends on prices, rents, your tax rate and what you value.