Mentone Buyers Adopt Rent-Vesting Strategy as Home Prices Climb

Rising property prices in Mentone are fuelling interest in rent-vesting, a strategy where buyers invest in one suburb but rent their own primary residence elsewhere. With the median house price in Mentone topping $1.18 million at the end of June, the appeal of creative alternatives to traditional homeownership continues to gain ground among younger and mid-career professionals.

The debate has sharpened as rents surged across key Mentone postcodes and first-home buyer grants from the Bayside Council have failed to keep pace with the market. As vacancy rates along Como Parade West and around Mentone Station circle record lows, aspiring homeowners are assessing whether it still makes sense to prioritise buying where they want to live, or to embrace rent-vesting instead.

Mentone’s Stretching Home Prices

Local agents say suburbs such as Parkdale and Beach Road have seen house prices jump by more than 9% year-on-year, with apartments along Venice Street now reaching a median value of $765,000. Meanwhile, renting a modern two-bedroom unit in the Lumina Apartments building now costs about $560 per week, according to latest figures from Mentone Realty Group. For many, that outpaces what their mortgage repayments would be for a comparably-sized property if they could come up with a standard 20% deposit.

This is where rent-vesting becomes attractive: purchasing an investment property in a more affordable outer-neighbourhood, such as Cheltenham, hoping for capital growth and rental income, while choosing to lease in a better-located home close to beachfront cafes or the train line. Several financial planners in the Mentone area report a rise in clients employing this approach, making use of properties managed through the Bayside Investment Network.

Data and Changing Horizons

Data compiled by local property research group, The Mentone Data Collective, suggests fewer than 10% of first-home buyers in the city now purchase in their desired postcode. Instead, nearly three in ten opt to invest in a different area while renting where they prefer to live. The city’s average unit price has climbed past $690,000 as of June 2026, while rents have jumped by 13% since last year, compressing affordability from both angles for would-be buyers.

Prospective rent-vestors should factor in stamp duty, land tax, and the potential for vacancy periods in their investment property. On the upside, rental income from an outer-metropolitan townhouse can partially offset mortgage costs, freeing up cashflow to support living in a more convenient or higher quality rental home, perhaps near the Mentone Life Saving Club or the vibrant shopping strips on Balcombe Road.

For those assessing the rent-vesting path, the local advice is clear: thoroughly research vacancy rates, neighbourhood growth, and total outgoings before committing. Many local agents also recommend regular reviews of your investment’s performance to ensure it’s still on track with Mentone’s evolving property market. As prices continue their upward movement, mastering a flexible approach could be the key to both lifestyle and wealth-building over the coming years.

This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.