Should You Buy a House or Rent in 2025?

Should you buy a house or rent in 2025? Many Australians are turning to a smarter strategy called rentvesting (renting in a lifestyle-friendly location while investing in an area with better returns)

This blog explores the pros and cons of each path and includes a real-world case study, so you can decide what's best for your financial future.

Why Rentvesting is a Smart Property Strategy in 2025

Rentvesting has become a popular strategy for many who want to maintain lifestyle flexibility while building a property portfolio. This approach has been refined over more than a decade of experience in the real estate market, testing nearly every property strategy.

Key lessons we’ve learned over the years:

• How to build a scalable property portfolio across Australia
• How to invest for capital growth without giving up lifestyle
• How to make smarter, data-driven decisions in the property market

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Your Two Paths: Buy a Home or Rentvest

If you're looking to enter the property market in 2025, you have two options:

1. Buy a home to live in, using government grants and stamp duty concessions
2. Rent where you want to live, and buy an investment property where the numbers stack up

While first home buyer grants seem attractive, they often limit buyers to homes priced between $650,000 and $1 million, depending on your state. This could force you into suburbs with slower growth potential.

Rentvesting helps avoid this compromise by allowing you to:

• Live where you want
• Invest where property prices are rising faster
• Stay flexible while building long-term wealth

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How You Can Make the Right Decision: The Three Pillars

Consider these three decision pillars:

1. How Lifestyle Affects Your Choice

Grants may require a six-month residency in the purchased property. This might mean relocating to a suburb further from work, friends, or city amenities. Ask yourself:

• Is this an emotional or strategic purchase?
• Will the property meet long-term living needs?

Rentvesting allows you to live where you prefer while investing where returns are stronger. This can preserve quality of life without sacrificing financial goals.

2. How Your Borrowing Capacity Could Be Impacted

Owner-occupied properties don’t generate income, which may reduce borrowing power.

Rent may cost less than mortgage repayments. Meanwhile, an investment property generating rental income could maintain or only slightly impact borrowing capacity.

Investment properties also offer potential tax advantages. Consult with a qualified accountant to understand how these apply to your situation.

3. How to Build Long-Term Wealth the Smart Way

Buying a primary residence might seem safe, but may not maximise financial outcomes. Those who follow conventional paths often work until age 65 or 70 and still face financial pressure.

Instead, surround yourself with experienced professionals and adopt strategies that align with long-term wealth-building. Rentvesting supports logical, data-backed decisions rather than emotional ones.

Case Study: Why Rentvesting Outperformed Buying in 2025

With a budget of $630,000, here’s what we found:

• Buying a unit in Parramatta:
  In 5 years, prices only moved from $625,000 to $630,000, despite a booming market.
  
  
• Buying in Dubbo:
  A $375,000 house bought five years ago is now worth around $560,000. That’s significant capital growth in a regional hotspot.
  
  
• Renting in Pyrmont vs Buying There:
  Renting: $850/week
  Buying: $1,300/week (plus council rates, insurance, strata fees)
  
  

The rentvesting strategy allows you to live in a vibrant location while investing in areas offering real growth.

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What You Should Take Away from This

In the current market, rentvesting remains a powerful strategy for building wealth without sacrificing lifestyle.

Rents may rise, but so will yields in high-demand investment locations. Smart decisions today set the foundation for long-term financial success. Thinking outside the box leads to better-than-average outcomes. 

Ready to explore rentvesting opportunities in 2025? Speak with the Search Property team to identify the best investment locations and build a customised strategy. Book your FREE discovery call today and take the first step toward smarter property investing.