Proven Tips to Rentvest From Hillarys

Rentvesting lets you buy property without leaving Hillarys.

If you want to stay close to Whitfords Nodes beach access, the marina precinct or the local schools but cannot afford to buy where you rent, rentvesting offers a practical alternative. You purchase an investment property in a more affordable suburb, claim rental income and tax deductions, and continue renting in Hillarys while your property builds equity.

Why Hillarys Renters Are Looking Beyond the Suburb

Hillarys sits within the City of Joondalup and attracts renters who value proximity to the coast, established parks and local amenities including Westfield Whitford City. The area also draws families seeking access to schools such as Hillarys Primary School and St Mark's Anglican Community School. Renters in Hillarys often face a gap between what they can afford to buy locally and what they need to remain in the area.

Rentvesting closes that gap by allowing you to enter the property market in a suburb where rental yields support an investment loan while you continue to rent near the coast. You build equity in an appreciating asset without relocating to a less desirable area or waiting years to save a larger deposit for a Hillarys purchase.

Investment Loan Structure for Rentvesters

An investment loan is assessed differently to an owner-occupier home loan. Lenders apply a serviceability buffer, currently set at 3.0 percentage points above the product rate, and calculate your borrowing capacity using your gross salary, the expected rental income from the property, and your existing expenses including your current rent.

Rental income is typically assessed at 80 per cent of the market rent to account for vacancy and maintenance periods. If the property is expected to generate rent at current variable rates, that income offsets part of your loan repayment when lenders calculate serviceability. Your own rent remains an expense in the assessment, so your total borrowing capacity as a rentvester is often lower than if you were buying to occupy the property yourself.

Consider a renter in Hillarys earning a combined household income who wants to purchase a unit in a more affordable northern suburb. The lender assesses serviceability at the loan rate plus the 3.0 percentage point buffer, treats the expected rental income at 80 per cent, and deducts the renter's current Hillarys rent as an ongoing expense. The borrower qualifies for a loan amount that reflects both the rental income and the higher overall expense base. The structure works because the investment property generates income that partially funds itself.

Interest Only Repayments and Cash Flow

Interest only repayment structures are common for investment loans. You pay only the interest charged each month and do not reduce the principal balance during the interest only period, which typically runs for one to five years. This lowers your monthly repayment and improves cash flow, leaving more room in your budget to cover your own rent and other living costs.

Interest only investment loans carry higher interest rates than principal and interest investment loans, and the rate is also higher than an equivalent owner-occupier loan. Lenders price the additional risk into the rate, but the cash flow benefit often outweighs the rate difference for rentvesters managing two sets of housing costs. At the end of the interest only period, the loan reverts to principal and interest unless you refinance or negotiate a new interest only term.

Tax Deductions and Negative Gearing

Interest on an investment loan is deductible against your assessable income. Other holding costs including council rates, insurance, property management fees, repairs and depreciation are also deductible for the period the property is rented or genuinely available for rent. If your deductible expenses exceed your rental income, the property is negatively geared and the loss reduces your taxable income, lowering your overall tax liability.

For properties purchased before 12 May 2026, or for eligible new builds purchased after that date, you can continue to deduct losses against your salary and other income indefinitely. For established properties purchased after 12 May 2026, losses from the 2027-28 income year onward can only be offset against other residential property income, including capital gains on residential properties. Excess losses can be carried forward. Properties acquired between 12 May 2026 and 30 June 2027 can be negatively geared under the current rules until 30 June 2027 only.

Rentvesters in Hillarys who purchased an investment property before the rule change retain full access to negative gearing. Those purchasing now should consider the timing of their purchase and whether a new build qualifies for the exemption. A loan health check can help clarify how the tax treatment applies to your specific scenario.

Deposit and Lenders Mortgage Insurance

Most lenders require a minimum deposit of 10 per cent for an investment loan, though some products accept less if the borrower meets specific serviceability criteria. A deposit below 20 per cent triggers Lenders Mortgage Insurance, which protects the lender if you default. The premium is calculated on a sliding scale based on the loan amount and loan to value ratio, and is capitalised into the loan or paid upfront.

LMI premiums are higher for investment loans than for owner-occupier loans at the same LVR. If you borrow at 90 per cent LVR to purchase an investment property, the LMI premium can add several thousand dollars to your total borrowing cost. The premium is a one-off charge and does not recur, but it does increase your loan balance and your minimum repayment.

Some rentvesters use equity in another property or combine savings with a family guarantee to reach a 20 per cent deposit and avoid LMI. Others accept the premium as a cost of entering the market sooner rather than waiting to save a larger deposit. The decision depends on your cash flow, your timeline, and the rate at which property values are moving in your target suburb.

Choosing the Right Investment Property Location

Rentvesters in Hillarys typically target suburbs with strong rental demand, lower entry prices and potential for capital growth. Proximity to employment hubs, public transport, schools and shopping centres supports rental demand and reduces vacancy periods. Suburbs within the northern corridor or outer metropolitan areas often offer better rental yields than coastal locations, making them suitable for buyers who want the property to generate income while they continue renting near the beach.

In our experience, rentvesters often overlook body corporate fees when comparing units to standalone houses. A unit in a complex with high quarterly levies reduces your net rental income and affects cash flow. Check the strata budget and recent levy history before committing to a purchase. Properties with swimming pools, gyms or large common areas tend to carry higher body corporate fees, which are deductible but still require funding each quarter.

Variable Rate or Fixed Rate for Investment Loans

Variable rate investment loans allow you to make extra repayments and access offset accounts, which reduce the interest charged by offsetting your savings balance against the loan balance. Fixed rate investment loans lock in a rate for a set period, typically one to five years, and provide certainty over repayments. Fixed rate products generally do not offer offset accounts or unlimited extra repayments during the fixed term.

Rentvesters who plan to pay interest only for the first few years often prefer variable rates with an offset account. You park your savings in the offset account, reduce the interest charged on the loan, and retain access to your funds for other expenses or opportunities. The offset balance does not reduce the loan amount for LVR purposes under current prudential standards, but it does reduce the interest you pay each month, which improves cash flow and increases the deductibility of your interest expense.

If you expect rates to rise or want certainty over your cash flow, a fixed rate product provides stability. You know exactly what your repayment will be for the fixed period, which makes budgeting simpler when you are managing both a mortgage and rent. Some borrowers split their loan between variable and fixed to balance flexibility and certainty.

Refinancing and Portfolio Growth

As your investment property increases in value and you pay down debt, you build equity that can be released to fund further purchases. Refinancing your investment loan to access equity allows you to use the growth in your first property to fund a deposit on a second property without selling the first asset. This approach accelerates portfolio growth and compounds your exposure to capital appreciation and rental income.

Lenders assess your borrowing capacity for each additional property using the same serviceability rules, including the 3.0 percentage point buffer and the debt-to-income limits introduced in February 2026. Each institution can lend up to 20 per cent of new investor loans to borrowers with a total debt-to-income ratio of six times or greater. If your combined debt across all properties exceeds six times your gross income, you may need a larger deposit, a co-borrower, or a different lender to proceed with a second purchase.

If you are ready to take the next step, or if you want to understand how rentvesting fits your financial position and timeline, call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions