A Sydney woman says becoming somebody else’s landlord was the only way she could afford to crack into an increasingly expensive property market. More young Aussies are finding themselves locked out of the capital cities and are turning to cheaper areas to buy instead.

Karen Nguyen, who is in her 20s, says it “wouldn’t have been possible” to enter the property market unless she purchased an investment property outside the major capital cities.

With the average home price in Sydney now sitting at north of $1 million, Nguyen said it would have taken her years to save up a deposit for a property in her home city.

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“It was proving to be much more challenging if I were to buy my first home in the area where I wanted to live in Sydney and the timeline of it happening soon felt unrealistic,” she said.

“Even if I could afford the deposit, the repayments would be difficult to maintain with the high interest rates.”

Nguyen, who was born in Adelaide before relocating to Sydney as an adult, decided to ‘rentvest’ in Adelaide and bought an investment property with a 10 per cent deposit. The Director of Admissions at a tech startup then later bought another investment property in Rockhampton.

Do you have a home buying story to share? Contact tamika.seeto@yahooinc.com

‘Rentvesting’ is a home buying strategy where you purchase an investment property in an area you can afford, while continuing to rent in an area you want.

While continuing to live in Sydney with her partner and paying $900 a week in rent, Nguyen rents out the three-bedroom Rockhampton home for $520 a week.

“When the interest rates increased, my strategy pivoted to buying more affordable investment properties in high-growth areas and using the capital gains or equity accumulated across these properties over time to purchase my dream home,” she said.

More young Aussies rentvesting

New figures from digital home loan lender Tiimely Home found an 8.45 per cent increase in first-home buyers applying for investor home loans in 2024, up from 5.87 per cent in 2023.

Recent data from Commonwealth Bank similarly found Millennials were the most “active” property investors, accounting for nearly half of all the bank’s investment property purchases.

“Soaring housing costs have made immediately owning and living in their dream home increasingly difficult,” Tiimely Home head of retail Belinda Jackson said.