The case for not buying property

Discussion in 'Investor Psychology & Mindset' started by Car tart, 17th Nov, 2021.

Join Australia's most dynamic and respected property investment community
  1. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,256
    Location:
    Australia
    Would see it as he is taking a different type of risk, but he may jot be aware of it.
     
  2. MB18

    MB18 Well-Known Member

    Joined:
    25th Sep, 2018
    Posts:
    1,374
    Location:
    NT
    Its been discussed here before, but the differing opinions seem to be greatest along the generational lines... particularly between boomers and millenials.

    My parents also cant fathom my lack of interest in buying property. The reality it that times have changed.

    Unlike them I prioritize mobility and flexibility, unlike them I have easy low cost access to alternative investment options such as shares, unlike them I don't prioritize a quiet stable suburban life, I would hypothesize that renting is cheaper and easier for me than than it was for them too.

    Should I have a burning desire to ever stay in one place forever I can always sell shares to buy a property. Admittedly my strategy requires at least some disciple that not everyone has, and some may be better off with the traditional 'forced savings' that home ownership brings, but its not the only way to security that exists.
     
    Sticky and Travelbug like this.
  3. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,256
    Location:
    Australia
    Nothing wrong with any strategy, as long as you achieve your goals and have no regrets as you get older.

    But…..before this boomer v millenial divide, it used to be the same divide between boomer v gen x, then boomer v gen y. Gen x had all of the mobility and access to shares and other investments too (ok, not crypto). What happened to the gen x and y’s? Sort of ironic that they are ignored, because mostly they betrayed the revolution by settling down and buying property when it was ‘cheap’ around the noughties or during the start of the boom of the 2010’s?

    most people dont have a burning desire to stay in one place from the start. Seems to occur naturally when you have a family. The main difference is, do you anticipate your changes, or have to play catchup after they occur?
     
    Last edited: 18th Nov, 2021
  4. MB18

    MB18 Well-Known Member

    Joined:
    25th Sep, 2018
    Posts:
    1,374
    Location:
    NT
    I cant speak for gen x, but I will admit that there are non financial benefits to owning ones own home.
    I'm not sure its a betrayal of a revolution, rather a change in priorities which is of course allowed.

    Any plan should have the ability to adapt to changing needs, maybe thiers did or maybe it didnt.
    I'm pro shares and dont really give a rats for home ownership but if I absolutely needed to realise the non financial benfits of owning a home then I can/will (as part of my plan is to ensure that I always can)
     
  5. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,256
    Location:
    Australia
    the experience of the last couple of years, for a lot of people, has been that their share investments havent caught up to property. For those who have benefited from leveraged growth over the last decades, its hard to imagine alternatives short of outliers like buying afterpay or tesla or bitcoin early.

    not saying that will be you. But as long as you are comfortable with the risks (and consequences) of not owning property….. would imagine most people who own are just relieved that they did buy property.
     
    craigc and MB18 like this.
  6. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,932
    Location:
    Brisbane
    It's interesting how people look at risk so differently.

    To me, owning only a V8 Toyota and an off road 4x4 caravan and not having enough money or assets to provide a place for us to live when we are too old to keep travelling is a much bigger risk.
     
    craigc, Travelbug and skater like this.
  7. spoon

    spoon Well-Known Member

    Joined:
    17th Nov, 2016
    Posts:
    1,762
    Location:
    Time-dependent
    I agreed. And these two are moving targets and change with life, as circumstances evolve.
     
  8. spoon

    spoon Well-Known Member

    Joined:
    17th Nov, 2016
    Posts:
    1,762
    Location:
    Time-dependent
    I moved around quite a bit in my younger years due to career development. Different states in Australia, capital cities to regionals, then overseas. My strategy, not always right but looks ok long term, is to always buy a PPoR. That gives me the discipline to put some money into an investment. Property, chosen wisely, has been giving me positive gains, although some IPs in the past stayed stagnant. The good thing about such mobility is I have a reasonable understanding of the markets of different sorts. Now it enables me to buy IPs across cities and nations.
     
  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    To some people super is a thing to spend. For others its a pot of wealth you must live off. Some people are lifetime renters as they spend and live off the paypacket and never commit to a home. They often have financed cars. Their income stream is about having enough to pay for the financial commitments. For investors its about the complete opposite. The spenders think a pension is a freebie and a benefit. The investors would often prefer to NOT get a pension.

    A renter sees rent as a unavoidable weekly cost in todays money. A property owner locks in a lifetime stream of no rent in exchange for ownership. Hopefully they have 100% equity and so they pay nothing. And even have used the equity as leverage for other property that some other renter has paid to sustain. Repeat.

    If you have cashflow you can choose any investment and perhaps diversify. If you dont have cashflow there may be no choice. You are stuck paying rent. Possibly even from an age pension.
     
    craigc, Travelbug and skater like this.
  10. qak

    qak Well-Known Member

    Joined:
    1st Jun, 2017
    Posts:
    1,671
    Location:
    Sydney
    Went to pick up my daughter from a party and another mum turns up in a MB. I'm thinking 'she's rich' but in conversation she said they can't afford to buy a house.

    So I'm like (to myself!) - maybe if they'd spent $50K less on this car???
    Of course, the car probably is on a payment plan anyway.
     
    skater likes this.
  11. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    6,776
    Location:
    ....UKI nth nsw ....
    I don't think the money side will be a problem as he's salary sacrificed his wages for a long time I think from what the super balance stands at he could well draw 50k plus per years for more then 30 years plus as that was his aim super only it has worked out I guess,but 30k out of that for rental and other expenses then 50k would not go that far,but everyone has a different of success..
     
    Joynz likes this.

Price Accounting provide tax services and advice to developers on issues incl GST, Tax + Structure. Our free developer toolkit covers many of the key elements and is critical to a new development tax plan. Email for your copy and our new client pack.