Rentvesting With Co-Living: Invest for Yield, Live Where You Want

Answering: What is rentvesting with co-living, and does it let you invest for yield while living where you want?

Estimated reading time: 8 min read

Rentvesting means renting the home you actually want to live in while owning an investment property somewhere that produces a better return, and pairing it with purpose-built co-living aims to make that investment yield high enough to carry itself. The appeal is simple: you get to live in the suburb you love now, rather than waiting years to afford to buy there, while your money works in a higher-yielding asset elsewhere. It suits people who are priced out of buying where they want to live but still want to invest, though it is not right for everyone and depends entirely on the numbers stacking up. Across The Harmony Group team’s delivered projects, co-living has a historical average gross yield of 10.8 per cent, which is the kind of return that can make a rentvesting strategy cashflow-positive rather than a drain. This is general information, not personal advice.

If you have felt stuck between wanting to live somewhere you cannot afford to buy and not wanting to give up on investing, rentvesting is the strategy built for exactly that tension. It is increasingly common among younger professionals for good reason.

The reality is that rentvesting only works well when the investment genuinely pays its way, because you are covering rent and holding an investment at the same time. That makes yield the whole game. A low-yielding investment turns rentvesting into paying twice, while a higher-yielding one can leave you ahead. Success depends on the maths, not on the lifestyle appeal alone.

This guide explains what rentvesting actually is, why some investors pair it with co-living, and who it suits and what to watch. Treat it as a starting point for advice suited to your own situation.

Key Insights

• Rentvesting means renting where you want to live while investing in higher-yielding property elsewhere, decoupling your lifestyle from your investment location.
• It works best when the investment yield is high enough to cover its own costs, because you are paying rent and holding an investment at the same time.
• Purpose-built co-living has a historical average gross yield of 10.8 per cent across The Harmony Group team’s projects, which is why some rentvestors pair the two. Results are historical, not guaranteed.

Keep reading for the complete guide.

Table of Contents

• What Rentvesting Actually Is
• Why Pair It With Co-Living
• Who It Suits, and What to Watch

What Rentvesting Actually Is

Rentvesting separates two decisions that most people bundle together: where you live and where you invest. Instead of buying the home you live in, you rent it, and you put your investment money into property that makes better financial sense, often somewhere more affordable or higher-yielding. You get the lifestyle you want now and an investment working in the background.

The reason it has grown in popularity is affordability. Buying in a sought-after suburb can be out of reach for years, while renting there is achievable today. With rents rising, up around 5.7 per cent annually across the combined capitals, and a national vacancy rate near 1.0 per cent, neither renting nor buying is cheap, but renting keeps your capital free to invest where the returns are stronger rather than tying it up in a low-yielding home.

The catch is that it only makes sense if the investment performs. You are effectively running two housing costs at once, your rent and your investment’s holding costs, so the investment has to pull its weight. That is why the choice of what you invest in matters more for rentvestors than for almost anyone else, a point our guide on positive geared property unpacks.

Why Pair It With Co-Living

Because rentvesting lives or dies on yield, higher-yielding assets are a natural fit. Purpose-built co-living lets rooms individually, and across The Harmony Group team’s delivered projects the historical average gross yield has been 10.8 per cent, with occupancy held above 98 per cent through specialist management. Set against a national gross yield of around 3.6 per cent for standard property, that difference is what can turn a rentvesting strategy from a monthly drain into something closer to self-funding. These are historical results, not guarantees, and past performance is not a guide to future returns.

There is also a tax angle worth understanding with advice. Purpose-built co-living is a new build, so under the announced 2026 negative gearing changes it keeps negative gearing available, unlike established property bought after Budget night. For a rentvestor building a strategy for the years ahead, that new-build status is one more reason the pairing is discussed, as covered in our guide to the 2027 negative gearing changes.

None of this removes the need for care. A higher yield still has to be real and net of costs, the property still has to be well located and managed, and the strategy still has to suit your circumstances. The Harmony Group applies a 118-point analysis framework and declines roughly 85 per cent of sites, and if co-living is not right for you, an honest assessment will tell you why.

• Favour genuine, net yield because your investment is carrying two housing costs.
• Understand how new-build status interacts with the tax changes, with advice.
• Keep the investment decision separate from the lifestyle decision.

Who It Suits, and What to Watch

Rentvesting tends to suit people who want to live somewhere they cannot yet afford to buy, who are comfortable renting their home, and who have the discipline to treat the investment as a genuine investment rather than an emotional purchase. Younger professionals and those prioritising lifestyle or career mobility often find it fits.

The things to watch are real. You do not get the main-residence capital gains tax exemption on an investment property, so speak to your accountant about the tax picture. You are exposed to both rental market movements as a tenant and property market movements as an owner. And the whole strategy depends on the investment performing, which brings you back to yield, location and management. This is a strategy to build with a licensed adviser, not on enthusiasm alone.

Rentvesting lets you live where you want while investing where the numbers work, and pairing it with higher-yield purpose-built co-living is how some investors aim to make it self-funding rather than a second housing cost. With a historical average yield of 10.8 per cent the team reports across more than 200 projects, the appeal is clear, but the strategy rests entirely on the investment paying its way. Run the net numbers and get advice before you commit.

For a deeper look, visit The Harmony Group to explore how we approach purpose-built co-living.

Frequently Asked Questions

Q: What is rentvesting?

A: Rentvesting is renting the home you want to live in while owning an investment property elsewhere that makes better financial sense. It lets you enjoy your preferred lifestyle now while your capital works in a higher-yielding or more affordable location. It works best when the investment genuinely covers its own costs.

Q: Why do some investors pair rentvesting with co-living?

A: Because rentvesting depends on yield, and purpose-built co-living has a historical average gross yield of 10.8 per cent across The Harmony Group team’s projects, against around 3.6 per cent for standard property. A higher yield can make the strategy closer to self-funding. These are historical figures, not guarantees.

Q: What are the downsides of rentvesting?

A: You forgo the main-residence capital gains tax exemption on an investment property, you are exposed to both rental and property markets, and the strategy only works if the investment performs. It also requires discipline to treat the investment unemotionally. Advice from a licensed adviser and your accountant is important.

Q: Is rentvesting right for me?

A: It depends on your goals, finances and comfort with renting your home. For general information about the co-living side, book a free, no-obligation strategy session, and if co-living is not suitable you will be told why. Speak to a licensed adviser about the strategy as a whole.

Want to Learn More?

The Harmony Group’s team brings 15 years of specialist experience and a track record across more than 200 delivered co-living projects. The approach is educators-first: honest numbers, realistic net yields, and a clear view of whether a strategy suits your situation.

Citations

• “Cotality (CoreLogic) Housing Chart Pack, May 2026”: Reports a national gross rental yield of around 3.59 per cent in April 2026 and annual rent growth of 5.7 per cent across the combined capitals, with vacancy near 1.0 to 1.7 per cent. propertyinvestmentprofessionals.com.au
• “SQM Research national vacancy, March 2026”: Records a national rental vacancy rate of 1.0 per cent, the tightest in around a year and well below the roughly 2.5 per cent decade average, reflecting how expensive renting and buying have both become. propertyinvestmentprofessionals.com.au

Related Reading

• How much rental income can co-living realistically generate?
• Positive cashflow property in 2026: where the numbers work
• What is positive geared property, and how does it work?
• How to build a positive-cashflow property portfolio
• Positive cashflow vs negative gearing after 2026

General information only. The Harmony Group provides general information about property and co-living investment, not personal financial, tax or legal advice, and does not hold an Australian Financial Services Licence (AFSL). It does not account for your objectives, financial situation or needs, so consider its appropriateness and seek advice from a licensed financial adviser, accountant or the ATO before acting. Past performance is not a guide to future results and historical figures may not be repeated. Any tax or regulatory measures described are announced rather than enacted and are subject to change.