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Do you rent or are you paying down your PPOR?

Discussion in 'General Property Chat' started by KJB, 31st Jul, 2016.

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Rent or Pay down PPOR??

  1. Pay down PPOR

    33 vote(s)
    60.0%
  2. Rent and looking to buy

    7 vote(s)
    12.7%
  3. Rent and plan to continue renting

    14 vote(s)
    25.5%
  4. Changing from PPOR to renting

    1 vote(s)
    1.8%
  1. KJB

    KJB Active Member

    Joined:
    25th Jun, 2015
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    Location:
    Perth/Bangkok
    Been catching up on lots of PC lately and noticed lots of people have mortgages and obviously their strategy involves paying down their PPOR.

    Just curious to get some numbers on who does this as opposed to those who rent and plan to keep on renting.

    Cheers,

    KJB
     
  2. KJB

    KJB Active Member

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    Location:
    Perth/Bangkok
    For me its renting and plans to continue renting - mainly because I cant figure out which city I'm going to settle in
     
    SOULFLY3 likes this.
  3. hash_investor

    hash_investor Well-Known Member

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    Location:
    Sydney / Canberra
    Not bad. Wish I could do just that and buy IPs where I could. Mrs. hash is a fan of PPOR
     
    mr500 likes this.
  4. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    Location:
    Perth
    None of the above.

    PPOR - IO, 80% lvr, all deductible debt and 80% of debt offset with remaining 20% of debt as a LOC for business use.
     
    Last edited: 31st Jul, 2016
    Blueskies and KJB like this.
  5. sanj

    sanj Well-Known Member

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    I rent, don't see that changing for a while. my capital is too valuable at this stage to have it tied up in a PPOR, not to mention the hit to servicability.

    renting has meant I have stayed in places I could never justify buying; eg renting a half floor 3 bedder in Kings park
     
    Colin Rice and Cactus like this.
  6. EN710

    EN710 Well-Known Member

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    Location:
    NSW
    PPOR - using offset so I count that as paying down :)
    I don't mind renting but hubby does, so PPOR it is
     
  7. HUGH72

    HUGH72 Well-Known Member

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    Location:
    FNQ
    PPOR paid off about 10 years ago, if we moved it would probably be into an existing IP.

    We have 2 dogs so I'm not sure how easy it would be to find a rental.
    I also wouldn't like having to put up with inspections etc and the possibility of having to move at relatively short notice if an owner wanted to sell.
    The benefits of having your own house extend far beyond financial considerations but I can understand why younger people without kids prefer to remain more mobile and rent. Being stuck with a big ppor loan really limits the ability to invest aggressively.
     
  8. Joynz

    Joynz Well-Known Member

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    5th Apr, 2016
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    Location:
    Melbourne
    None of the poll options.

    Not renting - but POPR paid off.

    Then, borrowed against PPOR to avoid LMI for IP. Paid that off too (well, good as - $ is sitting in offset).
     
  9. Casteller

    Casteller Well-Known Member

    Joined:
    30th Jun, 2015
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    344
    Location:
    Barcelona
    Always had such great places renting in different places (5 countries, beachfront Mosman and Bronte in Sydney) so had no motivation to buy my own place (except in London, bought there to escape a share house). Renting suits me fine, never had an "inspection", forced eviction (even when you´ve done nothing wrong) or a random annual rent increase, the scourges of the Australian rental scene.

    Renters get a bad deal in Australia and don´t have many protections so there is definitely some advantages in owning there compared to most other countries.
     
    Skilled_Migrant likes this.
  10. joel

    joel Well-Known Member

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    23rd Jun, 2015
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    Location:
    Adelaide
    I'm renting and that hurts my serviceability more than a PPoR would
     
    Colin Rice likes this.
  11. beachgurl

    beachgurl Well-Known Member

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    18th Jun, 2015
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    Location:
    Sydney
    I'm renting. I'd rather live in a suburb I like and near good schools than live in my previous PPR. With Sydney yields so low it makes sense to rent rather than buy.
     
  12. hammer

    hammer Well-Known Member

    Joined:
    28th Aug, 2015
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    416
    Location:
    Darwin
    Renting in Darwin, only because the market up here is dropping so fast it works out cheaper.

    Market has been dropping by 50k per year...rents are 20k.

    That being said we will buy a place of our own soon.....not for financial reasons.....just need our own place.
     
  13. Lacrim

    Lacrim Well-Known Member

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    Location:
    Australia
    Given that we're considering moving into one of our IPs next year, would be good to know from the brokers on the forum if this is fact or myth eg say $700pw paid in rent compared to circa $700 weekly mortgage repayments for a PPOR. Is it calculated the same way?? Which affects serviceability more negatively?
     
    Terry_w likes this.
  14. LibGS

    LibGS Well-Known Member

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    Location:
    Melbourne, Australia
    My PPOR is IO, 80% LVR in a LOC type of loan. All deductible, which I've used to buy IPs.
     
    Colin Rice likes this.
  15. Bunlee

    Bunlee Active Member

    Joined:
    18th Jun, 2015
    Posts:
    37
    Location:
    Sydney
    My PPOR is 100% owned.

    I am of the vintage that believes this is important for non-financial reasons to own your home outright especially having grown up in a family that rented all their lives. I want a bit more stability for my family. Personal decision.

    It may not make sense financially to tie so much capital in a non income producing asset but it has appreciated in value significantly over the last 18 years or so.

    Having paid the home off gave me confidence to invest form a more solid base, again, a personal position.

    My LVR on IP is very low and so is the yield :(

    Best to all
     
    Colin Rice likes this.
  16. Angel

    Angel Well-Known Member

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    19th Jun, 2015
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    Location:
    Paradise, Brisbane
    Our PPOR was paid off about ten years ago, long before I knew anything positive about living as a renter. It has since been used like a giant credit card. Currently has the highest loan against it ever, all for the IPs, and I can easily see that being paid off within another five to ten years. Old school here, don't want to have PPOR debt going into retirement.
     
  17. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Location:
    Perth WA
    PPOR debt is calculated at 7.25% (mostly) where rent is actual payment so having a Ppor does hit serviceability.
     
    Colin Rice likes this.
  18. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Just wondering, what do you mean by "all deductible" in this instance?
     
    Whitecat likes this.
  19. D.T.

    D.T. Adelaide Property Manager Business Member

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    Location:
    Adelaide, SA
    Debt used for business or investment purposes is tax deductible.
     
  20. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Location:
    Sydney
    Am guessing that he has enough deposits taken from the PPOR that the PPOR debt is all now tax deductible via IP loans so to speak. (Even though the PPOR debt isnt actually tax deductible strictly speaking).
    The post needed some clarification.