Have you heard of ‘rentvesting’? If not, you may want to learn more about this property investment trend, as it is becoming increasingly popular in Australia.
People who are priced out of homes in their preferred location opt to rent in these areas instead, and then purchase another property somewhere more affordable. For example, you can enjoy an inner-city lifestyle by renting in Sydney while still taking your first step into the world of homeownership with a property purchase in a cheaper place.
Place Graceville Director Brad Robson told the Courier-Mail that rentvesting was the biggest change he had seen in the Brisbane market over the last 15 years.
“When I started, your first home would be the one you live in and the second would be the investment. It’s flipped its head now with people buying to get a foot on the investment ladder, and then they save to go into their own home,” he stated.
But what does this have to do with bad credit rating loans? Well, it appears the people likeliest to be rentvesting may be those who struggle the most to borrow money.
Millennials struggling with bad credit
Recent statistics from ING Direct showed property investment is most prominent among people in Generation Y, otherwise known as millennials, who are aged between 18 and 34 years old. According to the figures, 22 per cent of people in this group now own at least one investment property.
However, millennials are also the demographic most likely to have a bad credit rating. October 2015 statistics from Veda showed millennials had an average credit score of 682 with the firm, which was notably lower than the national average of 771.
TransUnion released a similar survey that revealed 43 per cent of borrowers aged 18 to 36 had a ‘sub-prime’ credit rating – the lowest possible credit tier.
Clearly, millennials have the desire to purchase homes, but they may find lenders consider them too risky for mortgages. This will no doubt leave them wondering how they can get a home loan with a bad credit rating?
Bad credit rating loans can help you obtain a mortgage for an investment property, whether you’re struggling to borrow due to an impaired credit history, discharged bankruptcies or other causes.
Do you have a turbulent credit history? Speak to a member of our team for a personal individual assessment to see if you’re eligible for a bad credit rating loan.