Why rentvesting is gaining ground
With affordability still out of reach in many top-tier suburbs, more New Zealanders are turning to rentvesting – a strategy where buyers rent their own home and invest in property elsewhere.
“Rentvesting is basically upgrading your lifestyle, going to a location that you want that’s usually more premium than where you could afford to have a mortgage,” seasoned investor and property coach Ilse Wolfe told 1News. “So, it’s a lifestyle upgrade, for less of a weekly outgoing.”
Wolfe and her husband sold their Grey Lynn home and now rent a house in Takapuna Beach, using the released capital to purchase in a more affordable area. They’re improving cashflow by using rental income to help cover the investment mortgage – while enjoying a better lifestyle
This strategy is gaining traction as affordability remains a barrier in major centres. According to Cotality, first-home buyers made up over 26% of all property purchases in Q2 2025, with even higher shares in Auckland (29%) and Wellington (36%).
It also comes as regional housing markets continue to perform. REINZ’s June data showed 10 of the 16 regions posted year-on-year median price increases – including Southland, which hit a record median of $502,500.
The emotional trade-off: Owning vs. renting
Rentvesting requires a mindset shift. The emotional pull of homeownership, especially for families, can be strong. But Wolfe said many fears are unfounded.
“One of the biggest mental hurdles in their decision was whether they were about to uproot their children’s lives,” she said.
But her experience renting next door to long-term owner-landlords has been unexpectedly rewarding: “We have neighbourhood drinks… all of the neighbours on our street, three or four times a year, get together. So we’re in a real community here and the kids are invited.”
What advisers should know
For advisers, rentvesting opens new pathways to homeownership – especially for younger buyers locked out of expensive metro suburbs. But it’s not without complexity.
Wolfe recommends early conversations with an accountant to assess ownership structures, tax obligations, and whether KiwiSaver can still be used (hint: it usually can’t if the property won’t be owner-occupied).
“You may also need to bring in a pro to help you run the numbers,” Wolfe said. She also advises leaving room in the rent budget for future increases: “You don’t want that mental load on top… there’s enough to juggle these days.”
A strategic entry for first-home buyers
Some of Wolfe’s clients are skipping the traditional owner-occupier step entirely.
One couple bought two rental properties in the regions while continuing to rent in a desirable city neighbourhood. Even after the birth of their first child, the properties were cashflow-positive.
“They’re making money from a rental property, they’re living in a home that’s better than what they know they could otherwise afford,” Wolfe said. “So, they are moving forward, and they now have two rental properties before they’ve even bought their own home.”
Not for everyone, but increasingly worth considering
Rentvesting isn’t a fit for every borrower, but for many priced out of their dream postcode, it may offer a smarter way forward. It’s a strategy that allows progress – just not via the traditional path.
And for mortgage advisers, it’s a growing trend worth raising with clients who feel stuck on the sidelines.
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