Cheaper to buy than rent

Great qualities for a tenant to have. Especially point 1.
Must put that as a box to tick in my application forms.
Tick if you ever feel the need to smash other people's property with a hammer.

Lol

 

1. I agree
2. I agree
3. Shouldn't be "random" inspections..
4. I guess you just need to weigh that cost up with others compared to renting and work out the overall opportunity cost...

Def not for everyone..
I swore I would never rent.
We are currently living in one of our IP's, for the propose of saving for a better PPR. However as time goes on im doubting the strategy because:

1. It is going to take another 12-18 months to save a full deposit (I didn't want to dip into equity in our portfolio for the purpose of buying non deductible debt, plus increasing the overall LVR) or sell any property to fund deposit..

2. The house we do buy will not be my dream home. So we will borrow circa $550k and smash a big chunk of our income servicing this debt, for us to finally build enough equity to then want an upgrade in 10 years time for the house to own between the age of 40-55/60.
So chasing a lovely home which we may never obtain, in the younger years of our lives..
You may say we have too high expectations or standards and we should settle.. (Trust me I'm living in my investment property in St. Albans ATM, which was my first buy straight out of uni, so I've lived in the best and worst areas of melb).

But what I'm trying to say is that to get to that next home, the dream home in 10 years it will be a very hard slog, and when we get there we may not want that in life anymore..

Whereas we could go and rent such a house today! In the areas we want, to match the lifestyle we want (cafes, wine bars, walking tracks along rivers etc). Then as our lifestyle choices change we can move to suit..
The big one is living in the school zone for when we have kids..

Edit: this is assuming that we will invest the differential between owning and renting into our portfolio and not squander it on fancy dinners and wine..

I can totally appreciate if it is a sub $500k home and it is rent vs buy, then it is but an academic exercise, but I'm just thinking big here like what Mumbai was talking about.. No way I want to tie up my cash in a 700-900k loan for our home, we don't have the privilege of old money in our families.

Also is the issue of investing vs lifestyle.
By buying that big lovely house you significantly reduce your servicing, your home loan repayments are generally assessed at a higher internal rate (7+%), whereas rent is assessed at actual.. So the big dream home may paralyse your investment journey.. One may come at the expense of the other.. Conflicting values..

My whole life I wanted my house, my shed, my garage, gym set up etc.. However those things may come at the expense of my financial freedom and keep me running like a mouse in the wheel.. It has only been over the last 4 Months I have seen the true value of financial freedom over material possession!

Nek I'm sorry my post was not directed at you! Just my viewpoint at present..

 

Awesome post @Greyghost! I've been long thinking about moving out of our PPOR. So far living in PPOR in Sydney works for us as it's relatively cheap one with only $390k loan against it. Though I spend an hour one way to get to work which I don't mind as I catch a train and read the forum or educate myself. The Mrs is stay at home mom with small home run business. The biggest motivation for us to rent will be when our kid grows up a bit and will go to school. Being in a cachment of a better school will mean a lot to us. The other factor is if serviceability gets tighter we will consider renting earlier. Anyway, we have never seen a problem with renting and never felt a need to smash something in the house .

 

Nice post @Greyghost
I'm in a slightly different phase - a PPOR (albeit still small apartment) is like a big relief after years of renting small box apartments right out of university, moved about 4 times and got several terrible PMs in the process.

We now in the process of getting 2nd PPOR that's a house. I think we would enjoy bigger place for a while, though I can see that we might get back to renting in the future if location and cost makes a lot more sense (hubby disagree but I can see it coming in several years time).

 

I cab understand your POV but to me the actual figure is almost irrelevant if it fits in with my overall budget.

I usually keep a % of profit/earnings for something completely frivolous and that year i decided to indulge. was it overly indulgent? possibly but I'd do it all over again.

I had been wanting to live here since I first moved to perth in high school and I got to do it for 18 months.

920/wk isn't better use of my money when looked at in isolation but renting in the first place is what made that possible while still growing my net worth significantly that year.

 

Most people with a job.
The question is, how many of them are disciplined enough?

 

Yeah but its only money innit?

for me the 20k saving was immaterial, that's money easily made. personal satisfaction is more important, especially since this was a goal/reward and I still grew my finances significantly during this period.

 

Good stuff.
Which one did you end up going with? Plastico, concrete, shipping container pool?

 

Very nice.
Probably still warm enough to swim up there too.