Rentvesting with Ballarat — a real case study from rent to results

1) What rentvesting really means in 2025

Rentvesting is simple in theory: you rent where you want to live, and buy where you can afford to invest. In practice, the plan only works if the rent, loan, tax and lifestyle pieces fit together without straining your cashflow or derailing your long-term goals.

New to rentvesting? Start with our Rentvesting Guide (strategy, risks, lender rules and tax basics), then come back to this Ballarat example for suburb bands and scenario comparisons.

In 2025, Melbourne’s inner and middle rings still have price tags that put “buy where you rent” out of reach for many first-timers. Ballarat, by contrast, offers entry points and yields that line up better with real salaries and savings. Cotality suburb reports and data in tools like CoreLogic’s RPP platform show a city where median house prices in key pockets still sit in the $450k–$600k band, not $900k+.

This isn’t about picking on Melbourne or romanticising regional life. It’s about recognising that a Ballarat investment property can sometimes fit a rentvestor’s numbers better than a small, heavily stretched home in the suburb they currently rent in.

2) Ballarat by the numbers — the rentvesting lens

Here’s a simplified snapshot of Ballarat house prices and rents, based on Cotality suburb reports prepared on 15 November 2025. These are rounded bands, not valuations, but they’re enough to frame a case study.

*Price bands and yields are approximate, based on Cotality suburb reports and sample asking rents as at 15 November 2025. Rounded for simplicity and general information only.

For rentvestors, suburbs like Sebastopol, Redan, Wendouree, Delacombe and Ballarat East are usually where the first cut of numbers feels friendliest — you’re not stretching into the $700k–$900k range, but you’re also not sitting on a 2–3% yield. The question is how those numbers look when you set them beside the rent you’re paying where you live now.

3) Meet the case study couple — Ella & Tom

Ella and Tom are both 31, renting a two-bedroom place in Melbourne’s inner west for $750 per week (≈$3,250 per month). Their combined pre-tax income is around $190,000 per year. After a few years of steady saving and a couple of promotions, they’ve built up $180,000 in cash and offsets.

They’d love to buy locally, but comparable homes in the area they rent sit somewhere around the $900,000+ mark once you include competition on auction day. That’s a big step when they’d also like to keep a buffer and still have a life.

The question they put on the table is the one you see more often in 2025:

To answer it properly, they work through both paths using the rentvesting calculator and then sanity-check the strategy with their accountant and a broker.

4) Scenario A — buy where they live in Melbourne

First, Ella and Tom look at buying a modest three-bedroom townhouse in the area they’re renting in. To keep the numbers simple, we’ll use a round $900,000 purchase price as a working example. These are not suburb medians; they’re the sort of figures they’re actually seeing at opens.

How their $180k gets used — Melbourne purchase

With a $900,000 target, they could structure their savings like this:

• $90,000 towards deposit (10%).
• Roughly $50,000 for stamp duty, legals, inspections and moving costs.
• $40,000 left as a basic emergency buffer in cash and offset.

That uses all of their $180,000 in savings without touching credit cards or personal loans.

Loan size, LVR and LMI

On those numbers:

• Base loan before LMI: $900,000 − $90,000 deposit = $810,000 (90% LVR).
• Approximate LMI at 90% LVR for an owner-occupied loan: assume around 1.6% of the base loan, or roughly $13,000.
• They choose to capitalise the LMI, so it’s added to the loan instead of paid from cash.

That gives them a total loan of roughly $823,000. The true LMI premium would depend on the lender, product and policy, but this is a realistic working figure for a case study.

Repayments and cashflow — Melbourne purchase

If we assume an owner-occupied principal-and-interest rate of around 6.5% p.a. over 30 years (illustrative only), their monthly repayment on $823,000 sits around $5,200 per month.

Add another $700 per month for rates, insurance, maintenance and body corporate, and their total housing outgoings land just under $5,900 per month.

There are no rentvest-style deductions here, because this would be their home. The trade-off is clear: they’d own where they live, but household cashflow is now concentrated into one large mortgage and a modest buffer.

5) Scenario B — keep renting in Melbourne, buy in Ballarat

Next, they look at rentvesting. In this scenario, they keep renting the same Melbourne property at $750 per week, and buy an investment house in Ballarat East or Sebastopol instead.

Choosing the suburb and price point

Using the suburb reports, they shortlist a few Ballarat pockets. For the case study, we’ll assume they land on a tidy three-bedroom house in Ballarat East at an even $500,000, which is consistent with the “high-$400k to low-$500k” band in the data.

How their $180k gets used — Ballarat investment

For an investment purchase at 90% LVR, the $180,000 could be allocated like this:

• $50,000 towards deposit (10%).
• Roughly $30,000+ to cover stamp duty, legals and inspections.
• A deliberately large $100,000 left as buffer in cash and offset.

That still uses the full $180,000, but notice how much larger the buffer is in this rentvesting scenario.

Loan size, LVR and LMI

On these numbers:

• Base loan before LMI: $500,000 − $50,000 deposit = $450,000 (90% LVR).
• Approximate LMI at 90% LVR for an investment loan: assume around 2.2% of the base loan, or roughly $10,000.
• Again, they choose to capitalise the LMI, so it’s added to the loan.

That gives a total loan of roughly $460,000. In practice, each lender’s LMI scale is different, but this is a realistic working assumption for a first investment purchase at 90% LVR.

Rent, rate and repayment assumptions — Ballarat purchase

From the suburb data and current listings, they work with:

• Rent of around $430 per week (≈$1,860 per month) for the Ballarat East house.
• An investment P&I rate of 6.9% p.a. over 30 years.

On a $460,000 loan at 6.9%, the monthly repayment is roughly $3,030 per month.

They also allow about $450 per month for rates, insurance, management fees and a maintenance allowance.

Out-of-pocket cost on the investment

Before tax, the rough monthly picture on the Ballarat property looks like:

• Mortgage: ≈ $3,030 per month.
• Property running costs: ≈ $450 per month.
• Rent received: ≈ $1,860 per month.

That leaves an out-of-pocket shortfall of around $1,620 per month before tax. Some of the interest and expenses may be tax-deductible because the property is income-producing, but the exact outcome depends on their full situation and needs to be confirmed with their accountant.

Total monthly outgoings in rentvesting mode

Put together:

• Melbourne rent: ≈ $3,250 per month.
• Ballarat property shortfall: ≈ $1,620 per month.

Their combined “housing + investment property” outgoings sit around $4,870 per month.

That’s roughly $1,000 per month lower than the Melbourne purchase scenario — and they’re doing it with a much larger buffer of around $100,000 rather than $40,000.

Running both paths through the rentvesting calculator lets them see how things shift if rates move, rents soften or they change how aggressively they pay down the investment loan.

6) Five-year comparison — cashflow & equity, in plain language

Nobody can predict exact capital growth, but it’s still useful to sketch out what each path might look like after five years using conservative assumptions.

Scenario A — Melbourne home

If Ella and Tom buy the $900,000 home and it grows at a modest rate, they may have:

• Some principal paid down on the $823,000 loan from regular repayments.
• Potential capital growth on a single, large asset if the local market cooperates.
• No investment property deductions, but a simpler tax picture.

The challenge is flexibility. Most of their wealth is tied to one big property, and their monthly outgoings are sitting close to $5,900. Any change in income could force a rethink.

Scenario B — rentvesting with Ballarat

On the rentvesting path, after five years they might see:

• Principal paid down on the $460,000 Ballarat loan, helped by the tenant’s rent.
• Potential capital growth in Ballarat East or Sebastopol, if the market behaves.
• A more flexible living arrangement — they can move rental properties as life changes without selling the investment.

The trade-off is complexity. They’re managing a tenancy, more moving tax parts, and the emotional weight of “still renting” even though they’re building equity.

When we model both paths side-by-side in a tool like the rentvesting calculator and overlay the deeper guidance from the Rentvesting Guide, the difference isn’t about finding a mathematically perfect answer. It’s about choosing the path where the numbers and behaviour both make sense.

7) When rentvesting with Ballarat fits — and when it doesn’t

Rentvesting with Ballarat can make sense if:

• You want to stay close to a particular workplace, school or community in Melbourne but can’t buy there yet.
• Your savings and income comfortably support both rent and an investment loan without relying on overtime or bonuses.
• You’re comfortable being a landlord (or paying for good management) and understand vacancies will happen.
• You’re prepared to hold the property through multiple cycles, not trade in and out quickly.

It’s usually a poor fit if:

• The combined rent + investment loan leaves you with no buffer or savings capacity.
• You dislike the idea of renting and know it will stress you out psychologically.
• You see Ballarat purely as a short-term punt rather than part of a long-term plan.
• You haven’t yet spoken with a tax adviser about how investment property interacts with your broader situation.

A rentvesting strategy is a tool, not a personality test. If the numbers are tight and the lifestyle cost is high, it’s okay to park the idea and focus on building a bigger buffer first.

8) Next steps, tools & who can help

If you’re rentvesting-curious and Ballarat is on your radar, a sensible next move is to replace vague “what if” thoughts with structured testing. In practice, that looks like:

Step 1: Get clear on your total after-tax income, current rent, essential spending and savings rate.
Step 2: Shortlist a few Ballarat suburbs — for example Sebastopol, Redan, Wendouree, Delacombe and Ballarat East — and pull fresh suburb reports.
Step 3: Run at least two scenarios through the rentvesting calculator — one “buy where you live”, one “rentvest with Ballarat” — using realistic price, rent and rate assumptions.
Step 4: Read the Rentvesting Guide to understand the behavioural and tax angles, then sit down with your accountant to test the plan.
Step 5: Work with a broker who knows both Melbourne and Ballarat to structure the lending and pick a lender that fits the strategy, not just the headline rate.

Rate Challenge compares 35+ lenders and works with rentvestors across Melbourne, Ballarat and beyond. If you’re weighing up Ballarat specifically, the Mortgage Broker Ballarat page and our broader locations hub give you a feel for local pockets, transport and property trends before you commit.

When you’re ready to talk through your numbers, use the form above or head straight to the Contact Rate Challenge page. A short conversation can save a lot of guesswork.