Rentvesting is the strategy of renting where you want to live (typically expensive inner-suburb metro) while buying an investment property somewhere cheaper (regional town, outer suburb, growth corridor). The pitch is: get the lifestyle benefits of an expensive location plus the capital-growth upside of property without the eye-watering price tag of buying in your dream postcode.

The maths can work, but it depends on three things. First, the price-to-rent gap: rentvesting wins when the market you'd live in has a poor rental yield (3-4% gross) but the market you'd invest in has a better one (5-7%). Second, your relative growth assumptions: if your dream market grows faster than your investment market over the holding period, owning wins; if the investment market grows comparably or faster, rentvesting can win. Third, tax: investment property earns negative gearing benefits when negatively geared, but suffers CGT on sale; the principal place of residence is fully CGT-exempt — a big tilt back toward owning your own home for long-term holders.

The calculator above does the gross-of-tax projection, which is the right first cut. Layer in your marginal tax rate to figure out the negative gearing tailwind on the investment side, and remember the PPOR CGT exemption is potentially worth hundreds of thousands of dollars over a long holding period. For owner-occupier-only economics see our Rent vs Buy Calculator; for investment property cash flow see our Investment Property Calculator.