How to Use Rentvesting as a Painter

Rentvesting lets you own property without living in it.

You buy an investment property where the numbers stack up, rent it out, and keep renting in the area where you want to live. The rent you collect helps cover the mortgage, you build equity in a property you own, and you avoid stretching your deposit to buy in an expensive suburb you can barely afford.

Why Rentvesting Works for Painters

You get into the property market sooner, you start building equity while the market moves, and you keep living near work, mates, or the coast without blowing your deposit on a place you might not even want long-term. Painters working across metro contracts often need to stay close to job sites. Rentvesting means you can rent in a suburb that works for your current contracts and buy where the property actually makes financial sense.

Consider a painter renting in an inner suburb close to steady commercial work. Buying a unit in that same suburb would need a deposit well outside reach, plus the rent you would save by owning wouldn't offset the mortgage anyway. Instead, you buy a unit in an outer area or regional town where yields are higher, rent covers most of the loan repayment, and your deposit goes further. You stay rented where the work is, the tenant pays down your mortgage, and you own an asset.

The Loan Structure That Suits Rentvesting

An investment loan for rentvesting is assessed on the rental income the property will generate, not on whether you plan to live in it. Lenders apply a rental income factor, usually around 80%, meaning they assess your borrowing capacity using 80% of the expected rent to account for vacancies and management costs. Some lenders are more generous with that calculation depending on the property type and location.

You will need a deposit of at least 10%, though 20% avoids LMI. If you are using the 5% Deposit Scheme, that only applies to owner-occupied purchases, so it won't help with rentvesting. You can read more about buying your first investment property if you haven't held an investment loan before.

Variable rate loans are common for investment properties because they let you make extra repayments without penalty and access an offset account. Interest-only loans are another option. They lower your repayments during the interest-only period, which can help with cash flow if the rent doesn't fully cover a principal-and-interest repayment. You can explore interest-only loans to see whether that structure suits your situation.

How Rental Income Affects Your Borrowing Capacity

Lenders add 80% of the expected rental income to your assessment when calculating how much you can borrow. If the property is expected to rent for $400 per week, the lender will assess you as though you are receiving $320 per week in rental income. That rental income offsets the cost of the investment loan repayments in the serviceability calculation, but it does not eliminate the loan from your total debt position.

Your current rent payments, however, often drop out of the assessment once you purchase an investment property, because lenders assume you could move into the property you just bought if needed. That assumption does not always apply if you already own another property or if your current rental cost is particularly high. Each lender applies this differently. Understanding your borrowing capacity before you start looking will show you what loan amount you can actually access and whether rentvesting improves or restricts that capacity compared to buying a home to live in.

Investment Loan Features You Actually Need

An offset account linked to your investment loan lets you park your income and reduce the interest charged on the loan, but the full loan balance still generates a tax deduction. If you are holding cash for upcoming材料 costs, GST payments, or quarterly tax, the offset keeps that money accessible and working for you without reducing your deduction.

Portability matters if you plan to sell the investment property and buy another one without clearing the loan first. A portable loan lets you move the debt across to the new property without reapplying or paying discharge fees. Not all lenders offer this.

Some lenders let you split your loan between variable and fixed rates. That gives you certainty on part of the repayment while keeping flexibility on the rest. Others allow you to switch between principal-and-interest and interest-only during the loan term without refinancing. These features are not standard across all loan products. If you want them, tell your broker up front so the loan is structured correctly from the start. You can compare how different lenders structure investment loans before committing.

Tax Treatment from the 2027-28 Income Year

If you purchase an investment property after 7:30pm AEST on 12 May 2026, losses from that property can only be offset against income from other residential properties, including capital gains, from the 2027-28 income year onward. You cannot offset those losses against your painting income. Losses can be carried forward to future years and used against residential property income when it arises.

If you bought before that date and time, the old rules apply. You can offset investment property losses against your wage or business income as before.

From 1 July 2027, capital gains on residential property are taxed differently. The 50% discount is replaced with cost base indexation and a 30% minimum tax rate on gains accruing from that date. You index your cost base for inflation and pay tax only on above-inflation gains. This applies to individuals, partnerships, and most trusts. Speak to an accountant before assuming how much tax you will pay on a future sale.

Should You Rent Where You Want and Buy Where the Yield Works

Rentvesting makes sense if the rent you pay is lower than the mortgage repayment on a property you would want to buy in that area, and if you can afford to hold an investment property with a tenant covering most of the cost. It does not make sense if you are paying high rent in an expensive area and the investment property still runs at a loss you cannot afford.

You also need to be comfortable renting long-term. You will not have the security of owning the place you live in, and rent increases or lease non-renewals can force you to move. Rentvesting works when you value location flexibility and market entry over home ownership stability in the short term.

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Frequently Asked Questions