Education & Work Number crunching: public high school vs private

Discussion in 'Living Room' started by lettert, 13th Dec, 2019.

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  1. lettert

    lettert Well-Known Member

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    Yes, another public vs private high school post!

    But I'm not interested in the intangibles of the education - I'm interested in the money.

    My family and I have 2 boys registered at a top private school in Melb (one of the 30k+ fee ones), so hopefully when the time comes by admission shouldn't be an issue.

    We are tossing up between buying in the Mckinnon High School zone or just outside the zone. Comparable houses in zone cost 400-500k more that something a few houses out of zone.

    At approx 30k per child for 6 years each, thats $320k total - to be generous I'll round up to 500k total (including uniforms, overseas trips, etc). That's starting no earlier than 10 years down the line from today, so present value is about 250k.
    With this math, it's cheaper to buy out of zone and send the kids to private.

    So... what would you do in my position?

    Arguments for buying in zone:
    1. Access to good public high school. If we don't like it, we can always choose to send kids to private down the line
    2. Potentially greater house price appreciation due to supply/demand issues, compared to out of zone houses... though I'm not sure this will really be true?
    3. Potentially better demographic of neighbors - might not be PC to say this, but the nearby neighbors will be people working hard to send their kids to a good school. And I admire people who work hard to give their kids an education
    4. Slightly easier commute for kids to get to school [rather than 20min drive or longer on PT to get to private school]
    5. Kids classmates/friends will live nearby so maybe an easier social life?
    6. Money spent on a house is a capital expense so should give me a return, vs money spent on school fees which is an expense
    7. The high school zone is slightly closer to the train stations and ameneties (library, cafes, gyms, etc)
    8. Edit to add: intangible benefit of coed school (private one is all-boys') - no "locker room culture" or "inability to relate respectfully to women" etc that I hear bandied around. Then again, I receive marketing/magazines from the school kids are registered with, and they seem to do lots of activities (and extra curriculars) with sister school(s) including gender equality/respect/etc workshop stuff that sounds decent to me.


    Arguments for buying out of zone:
    1. Significantly cheaper, means financing is easier for us, which means the logistics of moving are slightly easier - we can keep current ppor, purchase new one and just move in. For the in-zone house, we need to sell our current ppor first, rent for a year (to make the transition and moving with two young infants easier), so the whole process will be a hassle. The plan will be to use full-service removalists both times to reduce hassles, but it's still going to be a bit tough...
    2. 400-500k saved straight away - can invest this immediately (whether shares/property etc)
    3. Intangible "private school is better arguments" including:
    a. Better or more responsive teachers
    b. Teachers who work extra hard to ensure kids do well in school
    c. More/better extra curriculars - this might be a factor since it'll possible be more convenient to have kids do all their music/sports/etc through school rather than having to arrange for these things seperately around school
    d. "Networking"/alumni effect, though I'm not sure if this is really true these days
    e. More impressive facilities (though I don't particularly care about this)
    f. Others... ?
    [not mentioning academic results here since both appear to be similar, though the private high school results are slightly better, and they were one of the schools mentioned in this article
    https://www.theage.com.au/national/...45-000-students-graduate-20191212-p53jhp.html ]
    4. Financially, we would sell our current ppor either way - out of zone for 500-400k less means we'd own our ppor outright immediately or almost immediately. In-zone means we'll need another 2-3 years to pay off the ppor completely


    Sorry for the really long post! I've tried to cover all possible arguments for and against.

    TLDR: public high school or private?
     
    Last edited: 13th Dec, 2019
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  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Why the elitest Private School rather than an independent at half the price (& half the facilities)?
     
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  3. Morgs

    Morgs Well-Known Member Business Member

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  4. turk

    turk Well-Known Member

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    We have been through this situation and my daughter has just finished year 10 at Mckinnon, 2 things to consider.

    - houses within the zone are only $100-150k more expensive than outside the zone.

    - consider renting in the zone but make sure you know the requirements for enrolment.
     
  5. Tonibell

    Tonibell Well-Known Member

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    As someone who has paid around $700K to schools (and still going ) - it is not a financial decision.

    But ..... if you are looking at it only financially then you will always be better off by buying the best housing asset and minimising school fees.

    By having kids later - we were able to do both.
     
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  6. lettert

    lettert Well-Known Member

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    Wow! Great to hear this! Couple of questions of you don’t mind-
    Does she like it there?
    How many students on average per class?
    Are you/she happy with the teachers?

    No need to answer the questions if they’re too personal but I’m happy to have run into someone whose child is at McKinnon now

    We’ve been looking at houses in Bentleigh east rather than Bentleigh (ie to me Bentleigh is close to centre rd Patterson station etc where they’re more expensive, vs Bentleigh east in coatwsville school zone) and I was surprised at the price differential

    But I think on the whole we’ll be heading off to the high school zone

    We’re looking at buying for the long term and will likely do this - more number crunching shows that a higher priced in zone ppor should provide greater tax free capital gains hopefully.

    Yep this is the conclusion I’m getting

    Congratulations!

    Unfortunately I don’t have a time machine to be able to do that lol

    Though tbh high school is a way off so who knows, that might be our situation down the line :/
     
  7. VanillaSlice

    VanillaSlice Well-Known Member

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    How about Melbourne High ? Great school and costs a fraction of private school fees ?
     
  8. lettert

    lettert Well-Known Member

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    Selective school- works if kids grow up clever, not so well if they’re dunces haha
    So not something we’ll bank on ;)

    Edit to clarify - they’re too young for us to know if they’ll pass the selective school entry test. I’m not calling them dunces (yet)
     
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  9. VanillaSlice

    VanillaSlice Well-Known Member

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    Woud your family be comfortable with the private school expenses ?
    Can a private school make a kid smarter or give them a better start in life ?
    Would a kid miss out much on future opportunities if he/she attend a normal local public school ?

    What difference would top private schools and average public schools make in how a kid turns out once he/she reaches adulthood ? Do they help shape the kid's behaviour, mindset, morals, work ethic, ambition and outlook in life etc ?

    I've no idea hence would be interested to know.
     
  10. VanillaSlice

    VanillaSlice Well-Known Member

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    700K and still ongoing !!! How many children do you have ?
     
  11. Tonibell

    Tonibell Well-Known Member

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    $700K would just be fees - the extras would take it way beyond that.

    Our lot all started from kindergarten- but now in the home stretch of the last one.
     
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  12. VanillaSlice

    VanillaSlice Well-Known Member

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    I've never realised kids cost so much to raise. So would you think private school is worth the high fees given the experience of your children so far ?
     
  13. Lizzie

    Lizzie Well-Known Member

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    Junior is in a private school - and currently costing around $5,000/yr for Year 12. It's the best in the district by a very long country mile (as we live in the country) and, basically, anyone that can afford to send their kids there, sends them because the public schools are rife with drugs and violence. The advantage of a private school is they can kick the misbehaving dropkicks out.

    Great and supportive teachers, all levels of social life (kids of doctors thru to bus company admin workers to firefighters) but all from a pretty good moral and ethical background.

    Anyhow - so education by the time she's finished will be around $50,000. Did look at sending to "Grammar" when she was in kindy but the $25,000/yr for kindergarten - and then upwards as they moved through - was a significant slice above what I was prepared to pay, and she wouldn't have had the variety of friends.
     
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  14. Tonibell

    Tonibell Well-Known Member

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    We are very happy with the choices we have made. Like most things - when you are committed to the expense life just joes on.

    Don’t think we would have invested any harder without it. Perhaps in the current environment it would have impacted our borrowing capacity - but it didn’t during our accumulation phase.
     
  15. lettert

    lettert Well-Known Member

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    Mostly because I don't know the Melb education situation too well - seems the relatively cheaper privates either perform worse academically or are heavily skewed towards religion. We are not Catholic/Christian/religious, so the religious bent is something we'd rather avoid esp since we can afford to.
    Am definitely open to any suggestions though!
    (Also if sending to private would prefer somewhere with a strong music program so kids can get their music done through school, this is one thing I can avoid arranging personally)

    I think there are a lot of threads on both this forum and others which cover these discussions, so I've tried to avoid getting into them much.
    I do believe, at the end of the day, the child's socio-economic background plays a major part in their education - I'm not necessarily saying it's only the rich whose kids do well either, look at certain immigrant/ethnic groups who focus heavily on academics, and how well their kids do despite being relatively poorer or going to worse schools.
    So I'm definitely aware that it's not just all about the schools

    Regarding our decisions, we've pretty much decided to buy in the zone based on these factors:
    1. Even though house prices are significantly higher than out of zone, we've decided we're better off having a higher base for ppor, ie more opportunities for future tax-free capital gains. If we didn't buy a more expensive ppor, we'd just spend the extra amount on investment properties which will attract tax on sale
    2. The decision is skewed by the fact that
    a. interest rates are so low
    b. Our ppor mortgage will be relatively low (600k max, hopefully)
    c. Rate of paying off mortgage relatively high (6 years max, hopefully, possibly less)
    d. All up, we expect to spend max 120k on interest, possibly less (fingers crossed) - significantly less than private school fees. If total interest expense was much higher (eg higher loan or interest rates or slower pay off times etc) then this equation would've been skewed

    Hope my math helps someone who's trying to make a similar decision down the line!
     
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