Renting is generally how people keep a roof over their head when they first move out of home. Less commonly explored are the options of strategic renting while you are paying one off.

If you already have a home loan, it may work out financially for you to rent out your home for more than the rent you would pay to live elsewhere. This means that the higher rent your new tenants are paying could go straight towards your repayments, and perhaps some of the money you are saving could too.

For example suppose:

the repayments on your house are $1000 a month,

you can rent it out for $1200 a month= +$200

you move out a few suburbs where rent will cost you $900 a month= +$100

that means $300 worth of additional repayment goes into the loan every month.

Alternatively, if you are comfortable share-housing, maybe you could rent out that spare bedroom or study. Right now it’s sitting empty, but it could be working for you, making you an extra few hundred a month for the loan.

Don’t forget, neither of these strategies are necessarily for the life of the loan, they need only be for as long as you wish.

Obviously there are other risks to be considered in implementing this strategy, but if you can mitigate these, it could be an option to save you money in the long run.

See if the team at Finstyle Planning Solutions can assist with your ideas.

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