Rent is dead money. Or is it ?

[buggerlugs]

http://www.news.com.au/finance/real-...-1226883685358

[Stazza_Brendan]

I built a house, starting when I was 25. My thoughts is I should have it paid off before I'm 50 all things going well, leaving me to save for retirement (if retirement still exists by that time).

[Pepscobra]

its a bit misleading...
It is still supporting the notion that buying your own property (whether you live in it or rent it out) is the way to go, and it is.

[Yellow_Festiva]

Choosing how you live (rent vs paying off to own) does not always come down to the best option for your back pocket.

It's whatever makes you happy.

Everyone knows that it can be financially 'smarter' to buy a demo or a 1yr old car. But some just love the fact they are the first owner and are willing to pay the premium for that 'new car' smell.

In some instances rent may be a better option financially than buying. Having said that, you can show me all the charts and graphs in the world that tell me renting may be better but I will still be paying off a mortgage, even if it means I'm greatly worse off financially.

Why? Makes me happy, allows me to sleep better at night.

Being from old school wog stock it's a pride / security thing as well. No mongrel has the right to knock on my door and move me on.

And that, is bloody priceless in my books.....

[Ben73]

Originally Posted by Yellow_Festiva

Choosing how you live (rent vs paying off to own) does not always come down to the best option for your back pocket.

It's whatever makes you happy.

Everyone knows that it can be financially 'smarter' to buy a demo or a 1yr old car. But some just love the fact they are the first owner and are willing to pay the premium for that 'new car' smell.

In some instances rent may be a better option financially than buying. Having said that, you can show me all the charts and graphs in the world that tell me renting may be better but I will still be paying off a mortgage, even if it means I'm greatly worse off financially.

Why? Makes me happy, allows me to sleep better at night.

Being from old school wog stock it's a pride / security thing as well. No mongrel has the right to knock on my door and move me on.

And that, is bloody priceless in my books.....

Couldn't have said it better myself.

It might cost more per week to pay my mortgage right now, but by age 40 I want my house to be paid off, then my weekly payments will be $0.
Yes land rates, and maintenance still need to be paid. But I just cannot wait till I have a house that is mine and no one can take from me.
I don't really like moving very often. Once I get my dream house hopefully within a few years, I will be happy there for 20+ years.

Plus does anybody want to be a retired 70 year old who has to pay $400 a week in rent?

[jpblue1000]

Haven't read the article but based on my workings I can afford to rent a much nicer place in abetter location then I could afford, someone else is responsible for maintenance.
If I save the money difference between rent and mortgage on an equivalent place, in 30 years over the life of a mortgage I will have saved and earned interest on a lot more than the value of the property would have increased.
The catch is saving that money and not spending it. A mortgage is forced 'savings' for the undisciplined.
I have bought as I want to add value through modification.

JP

[buggerlugs]

Originally Posted by Yellow_Festiva

Choosing how you live (rent vs paying off to own) does not always come down to the best option for your back pocket.

It's whatever makes you happy.

Everyone knows that it can be financially 'smarter' to buy a demo or a 1yr old car. But some just love the fact they are the first owner and are willing to pay the premium for that 'new car' smell.

In some instances rent may be a better option financially than buying. Having said that, you can show me all the charts and graphs in the world that tell me renting may be better but I will still be paying off a mortgage, even if it means I'm greatly worse off financially.

Why? Makes me happy, allows me to sleep better at night.

Being from old school wog stock it's a pride / security thing as well. No mongrel has the right to knock on my door and move me on.

And that, is bloody priceless in my books.....

I bet you loved the movie "The Castle" then.........

[Yellow_Festiva]

Originally Posted by buggerlugs

I bet you loved the movie "The Castle" then.........

LOL, was thinking to myself that this reference would be made by post #10

Loved the movie, and the fact he kept his house

Wonder how it would have ended if Mr Kerrigan was a tenant????

[Maka]

Originally Posted by Yellow_Festiva

Being from old school wog stock it's a pride / security thing as well. No mongrel has the right to knock on my door and move me on.

And that, is bloody priceless in my books.....

cheers, Maka

[MDS69]

Renting allows you to move on much much easier then owning/mortgage. Also generally rent is cheaper then mortgage payments.
To me having my own place albeit with a mortgage allows savings in the form of collateral from your mortgage payments as well as capital gain from the appreciation over the years provided you get a good cycle and the ecomany is healthy. Downside of owning is being financially responsible for maintenance and repairs.
Each to their own.

[Lotte]

Alternative: don't read single (and highly precise) scenarios that would apply to a poofteenth of the population and do what makes you happy.

My sister and her partner are 33 and 36, they're happy renting forever. They've been in the same place for years.
I'm 28 and want to own a place by the time I'm thirty. But that's because I'm rental cursed and hate moving around.
It's not about what's right financially. It's about what's right with all factors included.

[pbk1776]

Having a mortgage should not be feared by anyone - end of the day - property value goes up and you will never lose.

[Grippy]

Originally Posted by pbk1776

Having a mortgage should not be feared by anyone - end of the day - property value goes up and you will never lose.

It's like anything, it depends how long you hold onto it, long term you usually can't go wrong. I'm an Estate Agent and i've seen plenty of people losing money buying and selling. The usual problem I find is young couples deciding to re finance within a couple of years of home ownership.

[pbk1776]

Originally Posted by Grippy

It's like anything, it depends how long you hold onto it, long term you usually can't go wrong. I'm an Estate Agent and i've seen plenty of people losing money buying and selling. The usual problem I find is young couples deciding to re finance within a couple of years of home ownership.

That's right - we bought our first place 2 years ago - from my parent's investment property. So we're cheering
now because the equity gone up - we are thinking of getting another as an investment for the kids.

[zipping]

Originally Posted by pbk1776

Having a mortgage should not be feared by anyone - end of the day - property value goes up and you will never lose.

Can I just say to people that the above is definitely not true. Always research your purchase as best you can.

Prices have risen in Oz for a long time (for a number of reasons) but past behaviour isn't always indicative of future behaviour.

[pbk1776]

Originally Posted by zipping

Can I just say to people that the above is definitely not true. Always research your purchase as best you can.

Prices have risen in Oz for a long time (for a number of reasons) but past behaviour isn't always indicative of future behaviour.

Of course - you still need to do some research of booming places - you just don't buy houses where there are no returns or no demands.

Again, if you buy a property in the right place and in the right time - then your investment will grow - we cannot compare places like oranges and apples.

[turboclown]

Originally Posted by pbk1776

Having a mortgage should not be feared by anyone - end of the day - property value goes up and you will never lose.

Plenty of people have lost on buying houses, circumstances change through life and not everyone can plan for it.

The notion that property is the best investment is old and outdated, but there are lots of people with a vested interest who want to keep pushing the myth onto the next generation.

PS yes i own property, but i rent the house I live in why? Because renters and the ATO cover what my rentals cost me i dont pay a cent out of pocket so when i need money I can sell them and the capital gains are mine. I can rent a nice house, in a nice area that I dont have to maintain and it means I can move as the mood takes me, accept a job offer if it comes up without stress of selling or finding extra money etc.

For me its a no brainer, but everyone is different.

[pottery beige]

i am the king of my castle

[NAK302]

Originally Posted by pbk1776

Having a mortgage should not be feared by anyone - end of the day - property value goes up and you will never lose.

i'd suggest the value would not exceed the finacial costs over the lifetime of a 30 year loan. add to that insurance, rates, maintenance etc.

[Dash_XR]

I don't want to be renting when I'm 70 so..

[zilo]

buying a house is fine as long as you aren't too precious about your ego.

buy a small house that you can pay off without relying on it going up in value.

stuff the theatre room, the spa, the fancy taps.

just buy the minimum to stop paying rent and get rid of the bank ASAP.

otherwise you are just still paying rent...disguised as "repayments"

[duaned]

I couldn't sleep at night knowing my hard work and labour was paying off someone else's mortgage creating wealth for them, and not for me. I bought my first home when I was 22. I'm now 42, own my own home and would not have it any other way.

[BENT_8]

You know what I think...

I think its wonderful that this subject can now be discussed without all the BS directed towards renters.
5 years ago it would be 20 pages of **** slinging about why 'the best time to buy your first property was yesterday' etc. etc. and anything less is certain to see you a busted **** pensioner living in housing commission @70, and considered a leper.

It would appear that people are accepting that renting isn't as bad as its made out to be and comes down to personal choice and not a measure of financial status or image defining.

Most neighbourhoods needs a mix of each.
Owners who take pride in their properties and set the standard, investors to provide accommodation for renters and renters who pay investors.

[Bucknaked]

Benefits for both as well as negatives.

I guess it really comes down to your priorities in life, and where you want to be. Mine involves bundaberg rum, the beach and a tropical backdrop. A few bikes and cars thrown in for good measure.

[BHDOGS]

Buying a house is fine and watching it go up in value is fantastic but if you cant afford to buy a house it doesnt really matter either way. Lets me honest i doubt any 22 year old could afford to get a mortage for a 300,000 house these days. Reminds me of my father in law buy a house buy a house always ****ing in my ear thats good you paid 50grand for your 350,000 house you now live in find me one for 100,000 and ill buy it till then its someone else mortgage i gotta pay.

[arronm]

Originally Posted by BHDOGS

Buying a house is fine and watching it go up in value is fantastic but if you cant afford to buy a house it doesnt really matter either way. Lets me honest i doubt any 22 year old could afford to get a mortage for a 300,000 house these days. Reminds me of my father in law buy a house buy a house always ****ing in my ear thats good you paid 50grand for your 350,000 house you now live in find me one for 100,000 and ill buy it till then its someone else mortgage i gotta pay.

Not true, plenty of young guys earning big money over here in WA. My boy just bought a house. 300K, your dreaming , what house can you by for that.

[Stazza_Brendan]

Originally Posted by arronm

Not true, plenty of young guys earning big money over here in WA. My boy just bought a house. 300K, your dreaming , what house can you by for that.

A few FIFO boys are onto a good thing. Fly up to Mackay region for work earning good money, then fly back to home where the house prices are/were cheaper.
One of the guys at work is a bit younger then me. Maybe 24?, he has worked in the mines for a few years, bought a house in Ipswich not long after starting and he will have it paid off in no time. Does a few days overtime and doesnt have any expensive hobbies, no partner, no children.

Even in Mackay the house prices have dropped, some new houses are below build price.

[AndyXR6T]

I rented a house for a little over 2 years. Although it provided a roof over our heads, there was never any full security, the owns could of sold up at any time. My neighbour rents his place and in the time I have lived next door to him (4.5 years) he has seen the house sell twice. Luckily he maintains the place as if it was his and the new owners kept it as an investment property, but even he says he must have a plan B at all times incase of a sudden change in the market.

In the 2 years I rented I paid a little under $40K off someone else's mortgage. I'm grateful I had a roof over my head but that $40K would of taken a nice slice out of my current mortgage

[gtfpv]

ok i have over 600 000 in equity in good ol sydneys west , and still have a mortgage , and i'm not happy about it cause im 45 , and will have a mortgage for 5 more years, my house is 14 years old , we built it . it is starting to age , it needs new carpet , the timber floor could be replaced . the bathroom and kitchen arent new anymore , the roof tiles are aging and the driveway wont last forever , nor the retaining walls . but i'm supposedly infront cause i have equity , and thats true
but where do i buy , if i sell and buy ? the relestate agend will take a good 25g , then i will pay stamp duty on the next purchase . will i then be debt free ?
if i buy an older house will it need renovating , we all know the answer .
i have a friend age 37 , who bought a unit 6 years ago , he also owns a bike , a brand new xr6 , and recently gopt married and now has 2 baby children . his wedding cost 60k , his car was a ute , he borrowed against the unit top buy it then sold it and got the xr6 . then when the 2nd child came along . realised he needs a house . doing sums he had 20k equity . he looked around for the cheapest houses in sydney and at best was looking at a 400k mortgage , and a wife who cant work cause childcare takes her wage . this guy wanted to see the world so did . 3 times , how else would you ever do it without having a job and paying for the trip . nothing wrong with that .
he just sold and is now renting a house .
dont call him a dill , cause i dont think he is , he couldve just slogged away trying to pay off a house for 40 years since age 22 if he'd wanted

[Franco Cozzo]

I don't even know if I'll own a house, I want to get a nice 5th wheeler caravan and a rural property as a base.

Cause when it all turns to **** for me I can move on easily.

Not keen on owing the bank any money, because you become a slave to your employer for the next 30 years, I'm an opinionated guy and if I don't like something I say it how it is, so hell if I'm ever going to be held hostage by an employer and a bank.