Rentvesting means buying an investment property in one location while continuing to rent where you actually want to live. You use an investment loan to purchase a property that generates rental income, and the goal is to start building wealth through property ownership without having to move.
It's become a popular path for people in Springfield who want to enter the property market but aren't ready to commit to buying where they currently rent, or who find that the deposit required for a home in their preferred location is out of reach right now. The approach lets you split your lifestyle decision from your financial one.
Why Springfield Renters Consider Rentvesting
Springfield sits within one of the fastest-growing regions in Australia, with strong transport links to Brisbane and the planned inland rail passing nearby. Many people rent here for the lifestyle, proximity to work, or family reasons. At the same time, entry-level houses in established parts of Springfield can require a deposit that takes years to save.
Rentvesting lets you stay in the area while buying an investment property in a more affordable location. You continue renting a townhouse near Orion Springfield Central while purchasing, for example, a unit in a regional Queensland town where rental demand is steady and the purchase price allows you to enter the market sooner.
The investor deposit you'll need depends on your lender and loan features. Most lenders require at least 10 per cent of the purchase price as genuine savings, though some accept gifted deposits or equity from a guarantor. At a 10 per cent deposit, you'll pay Lenders Mortgage Insurance. At 20 per cent, you generally avoid it.
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How Investment Loan Interest Rates and Repayment Options Work
Investment loan interest rates are typically higher than owner-occupier rates, reflecting the lender's view that investors carry slightly more risk. The rate you're offered depends on your deposit size, employment type, loan features, and the lender you choose.
You'll choose between a variable rate, a fixed rate, or a split combining both. A variable interest rate moves with the market, which means your repayments can rise or fall. A fixed interest rate locks in your repayment amount for a set term, usually one to five years. Many investors choose a variable rate to retain flexibility, particularly if they plan to make extra repayments or access an offset account.
You'll also decide between principal and interest repayments and interest only. On an interest only investment loan, you pay only the interest portion each month for a set period, usually one to five years, after which the loan reverts to principal and interest. This keeps monthly repayments lower during the interest-only period, which can help if rental income doesn't quite cover all costs. Your loan balance doesn't reduce during that time, so you're not paying down the debt. Principal and interest repayments are higher each month but reduce your loan balance over time.
Most lenders assess your serviceability on a principal and interest basis even if you choose interest only, and they apply a buffer of at least 3.0 percentage points above the loan rate. Where the property generates rental income, lenders typically count 80 per cent of the expected rent when calculating what you can borrow, to allow for vacancy and maintenance.
Understanding Negative Gearing and Tax Benefits
Negative gearing means your rental property costs more to hold than it earns in rent. The difference between rental income and your expenses, including loan interest, rates, insurance, and property management fees, creates a loss. That loss can be deducted against your other income, such as your salary, reducing your taxable income and the amount of tax you pay each year.
For properties purchased before 12 May 2026, this treatment continues until you sell. For eligible new builds purchased after that date, the same rules apply. For established properties purchased after 12 May 2026, from the 2027-28 income year onward, rental losses can only be offset against income from other residential properties or carried forward. This doesn't affect your ability to claim interest, repairs, depreciation, or any other deductible expense. It changes where those deductions can be applied.
Interest on your investment loan is a claimable expense, as are council rates, landlord insurance, property management fees, repairs, and depreciation on the building and fixtures. You can't claim the principal portion of your repayments. Stamp duty and other purchase costs are not immediately deductible but may reduce your capital gain when you sell. The ATO website sets out which costs are deductible, and it's worth speaking with an accountant before your first tax return as an investor.
Consider someone working full-time in Springfield on a taxable income around $90,000. They purchase an established investment unit in a regional area where rent covers most, but not all, of the holding costs. If the property generates a net loss after all deductible expenses, that loss reduces their taxable income. Depending on the size of the loss and their marginal tax rate, they might receive a refund at tax time or reduce their PAYG withholding during the year. The property still costs money to hold, but the tax offset reduces the actual out-of-pocket amount. Once the property is sold, any capital gain is taxed under the usual CGT rules.
Choosing Between Variable Rate and Fixed Rate Investment Loans
A variable rate investment loan gives you flexibility. You can usually make extra repayments, redraw those funds if the loan allows, and link an offset account to reduce the interest charged on your loan balance. If you plan to pay down the loan faster, or if you want access to funds for future investments, a variable rate structure supports that.
A fixed rate locks in your repayment for the fixed term, which helps with budgeting and protects you if interest rates rise during that period. The downside is limited flexibility. Most fixed rate loans restrict extra repayments and don't offer offset accounts. If you break the fixed term early, you may face significant costs.
Many investors split their loan, fixing a portion for stability and leaving the rest variable for flexibility. A split doesn't have to be 50-50. You might fix 30 per cent and leave 70 per cent variable, or any combination that fits your goals. Each lender offers different split options and different fixed rate terms, so it's worth comparing a few before committing.
Building Wealth Through Property Investment Strategy
Rentvesting is one part of a broader property investment strategy. The aim is to build wealth over time by holding an asset that, in most markets, appreciates in value while generating passive income through rent. You're not trying to get rich overnight. You're using leverage, borrowing most of the purchase price, to control an asset that you couldn't afford to buy outright.
Your loan to value ratio matters. At 90 per cent LVR, you have 10 per cent equity. As you pay down the principal and the property value grows, your equity increases. Once you have enough equity, you may be able to leverage equity from the first property to fund a deposit on a second, expanding your portfolio without needing to save another deposit from scratch. This is called equity release, and it's how many investors move from one property to two or more over time.
The key is to buy in an area with strong rental demand, manageable vacancy rates, and realistic prospects for capital growth. Regional towns with stable employers, university suburbs, and growth corridors on the edge of capital cities are common targets. Springfield itself has seen strong growth, but rentvesting usually involves buying elsewhere while renting locally.
Not every investment works out as planned. Vacancy periods reduce your rental income, unexpected repairs eat into your budget, and interest rate rises increase your repayments. Building a buffer, keeping an emergency fund, and buying a property you can afford to hold even if it sits vacant for a month or two will keep you out of trouble.
What to Know About Investment Loan Refinance
An investment loan refinance means moving your existing loan to a new lender or restructuring your loan with your current lender to get better terms. Investors refinance to secure a lower interest rate, access equity for another purchase, switch from interest only to principal and interest, or consolidate multiple loans.
Lenders reassess your financial position when you refinance, including your income, existing debts, and the current value of the investment property. If the property has increased in value since you bought it, your LVR improves, which may qualify you for a better rate or remove the need for LMI on any additional borrowing.
Refinancing has costs. You may pay discharge fees to your current lender, application fees to the new lender, valuation fees, and potentially legal costs. If you're breaking a fixed rate term, break costs can be substantial. It's worth running the numbers before you commit to make sure the benefit outweighs the expense.
If you're planning to expand your portfolio, refinancing to access equity is a common step. Lenders typically allow you to borrow up to 80 per cent of the property's current value without paying LMI, so any equity above that threshold can be released and used as a deposit on your next purchase. This is one of the main ways investors scale without starting from scratch each time.
Making the Decision to Rentvest
Rentvesting isn't for everyone. It works if you're comfortable being a landlord, if you can manage the holding costs, and if you're prepared to stay invested for several years to see the financial benefit. It doesn't work if you need certainty about where you'll live long-term, or if the idea of managing tenants and repairs feels overwhelming.
Before you buy, get clear on your goals. Are you trying to get a foothold in the market? Build a deposit for a future home? Create a second income stream? The property you buy, the loan structure you choose, and the location you target should all align with what you're trying to achieve.
Springfield's rental market is strong, and many people who start as renters here go on to buy their first investment property elsewhere while continuing to rent locally. It's a practical path, and with the right loan structure and property choice, it's one that can set you up financially over time.
If rentvesting sounds like the right move for your situation, the next step is to talk through your borrowing capacity, compare investment loan options, and get a clear picture of what you can afford to buy. Call one of our team or book an appointment at a time that works for you.
Frequently Asked Questions
What is rentvesting?
Rentvesting means buying an investment property in one location while continuing to rent where you actually want to live. You use an investment loan to purchase a property that generates rental income, allowing you to enter the property market without having to move.
How much deposit do I need for an investment loan?
Most lenders require at least 10 per cent of the purchase price as genuine savings for an investment loan. At 10 per cent, you'll pay Lenders Mortgage Insurance. At 20 per cent, you generally avoid it.
What is negative gearing?
Negative gearing means your rental property costs more to hold than it earns in rent. The difference between rental income and expenses creates a loss that can be deducted against your other income, reducing your taxable income and the amount of tax you pay each year.
Should I choose a variable or fixed rate for my investment loan?
A variable rate gives you flexibility to make extra repayments and use an offset account, while a fixed rate locks in your repayment for a set term and protects you if rates rise. Many investors split their loan, fixing a portion for stability and leaving the rest variable for flexibility.
Can I use equity from my investment property to buy another property?
Yes, once you have enough equity in your investment property, you may be able to leverage that equity to fund a deposit on a second property. Lenders typically allow you to borrow up to 80 per cent of the property's current value without paying LMI, so any equity above that threshold can be released.
