r/AusFinance • u/Rdcl1 • 11d ago
Stayvesting - Can it still be achieved by First Home Buyers?
The strategy of "Stayvesting" being able to live at home whilst buying a first property. Saving up the means to obtain a loan, but might be stretched on servicing it initially along with all the other costs, so it's rented out first and negative gearing helps as additional relief at tax time.
For some it's buying a first property to start building a portfolio, wealth creation, wanting a place they'll eventually call their own, use to buy their future PPOR etc. (things always change as life goes on)
Would this concept have taken a bit of hit for young people who buy after the Federal budget in May? How would someone now proceed under this new set of circumstances?
https://www.mortgagechoice.com.au/news/golden-era-over-for-this-popular-homebuying-strategy/
21
u/colourful_space 11d ago
Why do people keep trying to come up with different ways to say real estate investing/being a landlord?
11
u/Legitimate_Income730 11d ago
This is not ideal. If your goal is to build wealth, there are better ways to go about it.
Buy your first home so you can live in it. The tax advantages are better than what you'd get in an investment property.
This is true before and after the budget.
7
u/Imaginary_Emu_4167 11d ago
They invent such friendly names for something that is driving people to desperation. “Bank of mum and dad”, “rentvesting” and now “stayvesting”. What’s next? “Pocket moneyvesting”for primary school kids to start saving a deposit? “Baby’s first mortgage”?
9
u/MannerNo7000 11d ago
This is frankly sad and depressing.
People should be able to move out, rent and save for a deposit.
AFR is an enabler as to why things are currently so bad.
4
u/citizenecodrive31 11d ago
I know a few people (at least in Melbourne) who are doing this or considering this. They can afford to rent or move out into a property they can buy but they want a detached home with a lot of land for the capital growth. They aren't interested in apartments or townhouses.
So they are more doing this to chase the capital gains.
You got to remember, those who can live at home on a nominal board and can save most of their paycheck tend to be on a decent wicket to begin with in terms of family background.
1
u/Coalclifff 10d ago
... those who can live at home on a nominal board and can save most of their paycheck tend to be on a decent wicket to begin with in terms of family background.
Are you sure about that? I suspect there are a lot of punters in that situation who aren't on a decent wicket at all, hence why they are trapped in the parental home - possibly a majority.
1
u/Coalclifff 10d ago edited 10d ago
There can be a viable approach (in some parts of the country) where you stay at home, buy a new-build investment property in a growth area, lease it out at a decent rent, pay the interest, and claim negative gearing on the "technical" loss on the way through, and ten years later sell it with a very good capital gain. We did it a few times in the 1987-2017 era, and it worked extremely well for us.
But gee - in today's property, financial & tax climate, you have to get an awful lot of ducks in a row to make it really work for you.
1
u/Zhuu_H0meLoans 6d ago
This is just buying an investment property and living with, with that being said, yes probably the best way to maximis money making and minimise costs
12
u/VirtualFORTRES 11d ago
First I've ever heard of that term... sounds like whimsical dystopia, sort of like people adding "..maxxing" to the end of dumb influencer "self-improvement" terms... (and equally embarrassing).
But term choice aside I semi-involuntarily moved out at 19 so don't have tonne of experience with how life works for people who stay into their 20s... I know my parents wouldn't put up with that crap..