Rentvesting in the ADF
In this video, Robbie explains how rentvesting can help ADF members build a property portfolio while serving, allowing them to eventually purchase their dream home using accumulated equity and government housing benefits.
Many members of the Australian Defence Force face a unique challenge when it comes to property ownership. Frequent postings across different locations can make it difficult to settle in one place long enough to buy a home in a strong property market. This is where the strategy of rentvesting can provide a powerful alternative.
Rentvesting allows ADF members to continue living in Defence-provided housing or rental accommodation while purchasing investment properties in high-growth locations. Instead of buying a home in a posting location with weaker market fundamentals, investors target areas with strong demand drivers such as population growth, infrastructure investment, and job creation.
Over time, as these properties increase in value, investors can build equity within their portfolio. This equity can then be used to fund deposits for additional investment properties or eventually for the purchase of a personal home.
For ADF members and veterans, this strategy can be particularly effective because it works alongside Defence housing entitlements and programs such as DHOAS. By carefully building a portfolio during their service years, members can create the financial foundation needed to purchase their dream home once they leave the military.
Rentvesting is ultimately about using smart property strategy and long-term planning to turn time in the market into financial freedom and housing security for the future.
Take the next step: Sign up for our free training seminars for ADF members and learn how to use your DHOAS, HPAS, and other ADF entitlements to build your financial future.
Video Transcript
Robbie:
There is no doubt about it — as an ADF member or a veteran, everyone decides to live in their own dream home one day.
Now if you’ve been posted around the country and each of those locations have had not very good property markets, you might be wondering how you’re going to be able to buy your dream home one day.
You can do this thing called rentvesting.
I’m going to show you right now in an awesome little case study exactly how it works.
Say you’re living in your married quarter, you’re living in accommodation or you’re receiving RA and you’ve got about $60,000 cash set aside.
Happy days.
You can then go and use that money as a deposit and costs to go and buy your first investment property.
Now that first investment property is going to be in the number one place in Australia.
It’s going to give you sustained low-risk capital growth.
It’s going to have a rent return and a tax return — the self-licking ice cream set-and-forget strategy.
You sit on that property for about a three year period.
Eventually there’s going to be some capital growth and there will be some equity there.
You can then utilise that equity for the deposit and costs (the DNC as it’s called) to go and buy your second investment property.
That second investment property — rinse and repeat.
Number one place in Australia, probably a different location.
It’s going to give you the best chance for sustained low-risk capital growth, rent return and tax return.
Set and forget. No dramas.
Fast forward another three years or so and you can do it one more time.
Now I’m not going to fill up the whole page with this ten property portfolio nonsense you may have seen elsewhere.
This is about doing things in a smart and measured way.
Fast forward a number of years.
Remember — it’s not if but when you leave the military.
You’re going to become a veteran and you won’t have access to ADF housing subsidies anymore.
So where are you going to live?
You’ve now got this awesome property portfolio.
You may be aware that within five years you can still use your DHOAS entitlement to buy your dream home.
And this is how you’re going to be able to do it.
You then identify what your dream home looks like.
Because you’ve been smart about building your portfolio, there will be significant equity sitting in those investment properties.
You can work with a mortgage broker to rebalance the portfolio, access chunks of that equity and place a large deposit on your own home.
If you’ve never lived in any of those properties, you may still qualify for the First Home Owner Grant depending on eligibility and price thresholds.
You can also apply your DHOAS loan subsidy.
How good is that?
Remember — you can still use that entitlement within five years.
That, ladies and gents, whether you’re a serving member or a veteran, is exactly how you go ahead and buy your dream home.
And it all starts back here by being smart enough and confident enough to jump into the property market with the right level of training.