Rent is dead money. Or is it ?

[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.

[jpblue1000]

Originally Posted by BHDOGS

Now that abbot wants to cut services and raise the retirement age and jack up taxes to pay for rich mothers to pop out babys i see longer mortgages being brought in by banks 40 year mortgages seem like no issue when you wont get **** from the gov till your 70 anyway.

Japan has had multi-generational mortgages for some time now!
'At the height of the Japanese property boom in the 1980s, the hundred year mortgage came into being.
Pushing payments onto children and grand-children was the only way home prices could continue to rise once they hit levels which the average Japanese worker could ever afford with a more traditional twenty or thirty year mortgage'


and Australia is probably going to follow suit and repeat the mistakes made.


JP

[BPXR6T]

Started work at 15, saved enough to educate myself by 18, saved enough to buy my first home by 21, over the next few years built a property portfolio that would allow me to retire at 40. Retired at 32. Back at work from time to time now though at 36. Of all my investments property performed the best, it was also the biggest no brainer requiring very little thought whilst I was occupied elsewhere. No having to constantly watch shares etc. In the end I sold off all the properties and bought a house to live in. Now I'm safe and settled. If I have a car accident and get disabled, get sick, get old, whatever I'm safe. No landlord kicking down the door for rent, no six month inspections, no having to shift houses when I'm 75. I sit here and look at my sister who is two years older and still renting. She's setting herself up to be a pensioner in retirement and has no contingency plan in case she gets sick or disabled. If that happens, she is eating into the money she has put away for retirement just to pay the rent. It's a precarious life as a renter. I look at property as the foundation of my financial security. I invest elsewhere but owning my own home was always the first box I wanted to check off. Bricks and motar is safe and secure. That's my perception anyway. Maybe my priorities were skewed from being homeless and hungry as a kid. Maybe I could have made more money from a riskier investment strategy, but property was a safe way to get to where I wanted to be.

[ILLaViTaR]

Not if you grow/manufacture drugs or turn it into a brothel.

The gen y way. Where negative gearing and booms have not been our fortune.

[HULK_I6T]

I was at casino last sat with a mate, playing blackjack on a $100 minimum hand table. luckily we won but if we didnt, it was money we were willing to lose in the name of entertainment. Would have walked away ok with it and still enjoyed the night. We do it a few times a year max, because we can.

There would have been more than a few people in the casino playing with their rent money. Living hand to mouth, Basically win or bust.

it was funny the amount of people that sat at the $100 table for one hand, done their dough, then walked away with an egg on their head, barely warmed the seat. It was obvious they didnt have the money to play and you could feel their pain when the dealer sunk em.

My question is are renters actually doing the financial analysis of buy vs rent? Or are they just living for today?

[zilo]

Originally Posted by EF_6

150K profit within 12 months....WTF!!!

there's just this ittsy bittsy little problem with that....


tax....

[zilo]

Originally Posted by f6_benito

You described agents rental fees as one of the costs? So why would a home owner occupier have that cost? Thus i presume you meant invester.

The problem is that renters dont save as you describe. Its lifestyle that prevents them entering the market to begin with. They prefer holidays / new cars / smokes / consumable type of spends etc. I havent met too many renters with big whopping bank balances or investment portfolios. What would they be investing in to easily outstrip property prices? speculative shares? TAB?

Its certainly not a paper profit.. If you buy a $400,000 house today and borrow $350,000, the house over 10 years is worth $600,000, then you still owe only $350,000 (presuming interest only payments)... $200,000 increase is your equity.. Renters dont get that equity.

What If someone owns two cheap houses.. One they live in and one they invest.. If they hold for 10 years and then decide to cash the investment out.. The appreciation value of the investment is basically used to pay off their house!!! Is that a paper profit?

Show me how a renter on an average wage can bank $200,000 in 10 years!!

I don't know where to start in response to this post.

So devoid of clear thinking ...am I the only one who laughed at this post?

[nstg8a]

Originally Posted by Mont5.0

400k for house and land is pretty good. I have just built a new house, we couldnt find anything we liked for the coin, after some investigation worked out to be around the same to buy land and build. Ended up with the house we want in a brand new area.

.

We spent ages looking at land, mostly on new developments, but the thought of paying close to 200k for on average a 4-450 sq metre block made it a lot tighter for our 400k budget, plus the land was selling so fast that every new land release the prices were climbing 4-5% each time.
We ended finding an old guy who seems to own most of a street that he's slowly developing just outside of a new area, 850sq metre block for 175k seemed like much better value to us.
With it just being the missus and I we don't need a huge house with 11ty different living areas and 300 ft ceilings, our house will be nice and simple, with everything we need, and nothing we don't.
I can't wait.

Renting has it's uses, but it's uses become chores as you get older, and I value security a hell of a lot higher now than I used to.

[jpd80]

Not all property investment is good, case in point.

Last year, we purchased a property in Brisbane off an investor who purchased the property off a developer approx six years ago.
Using searches, I was able to find out that they paid just under $400K for the property, rented it solid for six years
and then lost $100K on the sale price to us. the rent he was limited to meant returns would've barely covered interest and charges.

Had a good friend in the real estate business who told us buy off developers at your own risk, most have $90K or more
in additional profit on new house and land packages and if you're forced to sell inside two years, you risk getting sliced and diced.

[nstg8a]

Originally Posted by jpd80

Had a good friend in the real estate business who told us buy off developers at your own risk, most have $90K or more
in additional profit on new house and land packages and if you're forced to sell inside two years, you risk getting sliced and diced.

We noticed that just looking at prices, what we could get built for $400-450k was being advertised at $550k by developers.

The other thing that really ****ed us off was developers advertising ready built houses as ready to go, showed photos etc, but you ring them up to organise a viewing and it's 'oh it's not built yet, but your welcome to check out our houses at the display village'

[GREGL]

Originally Posted by turboclown

Maybe some have no choice but too live for today?

Im sure there where olenty of homeowners playing with their last dollars as well.

Heres a newsflash you judgemental ******** just because you have money and a house doesn't make you any bettervthen those without.

Get over yourself

Don't let him get to you , he's been stirring the pot for years . Some people love him for it but it not worth reacting to it , your the only one that stews , life just goes on for him . Blowing his trumpet to his own tune .

[SantoAU]

Originally Posted by zilo

I don't know where to start in response to this post.

So devoid of clear thinking ...am I the only one who laughed at this post?

Agreed, the fail was strong with that one.

I rent. I have children. I don't gamble, smoke, drink, own barely any whizz bang tech, I drive a 13 year old car and haven't had a holiday in however long I can remember. Why?

I chose to invest my money and time from working FIFO in to retraining myself at nearly 40 so that I can be of greater benefit to society. I've chased the money. It got me nowhere, except miserable. What will I show my kids for all of my hard work? Something honourable I hope, instead of a pile of materialistic rubbish that is two days on the verge away from junk.

Would I like a house of my own? Yes. Is it all consuming? Absolutely not.

[Syndrome]

This topic is revisited every few years on this forum. How long before this one gets locked?

[HULK_I6T]

Originally Posted by SantoAU

What will I show my kids for all of my hard work? Something honourable I hope, instead of a pile of materialistic rubbish that is two days on the verge away from junk.

Would I like a house of my own? Yes. Is it all consuming? Absolutely not.

If you have nothing to show for your work, how will this be honourable?

Times are going to get tougher for our next generation, buying a house could be out of reach for many despite their best efforts..

But if you plan now you might be able to give your children something, to make them free from having to work all their lives... That's honourable in my book, for my children to know I've sacrificed a little so they can live a better life

Renters just want the maximum disposable income for themselves to spend on their own treats, this comes at the expense of their children's future.

[Iggle Piggle]

Sounds to me what he will have to show for it all is well adjusted, motivated and respectful kids that were brought up knowing the value of both hard work and a dollar.

Some might say spending time at the $100 a hand black jack table also comes at the expense of your children's future - you know, disposable income to spend on your own treats...but then you did say you've sacrificed only a little. No matter what you leave for your children, if their upbringing has them turn out anything like yourself they will resent you for sacrificing only a little and ****ing away their entitlement at the $100 a hand table. Sure, you know you can afford it and still give them a start in life, but money donated to the casino is "dead money".

No, I don't rent - close to owning my home outright (only one - the one I live in). It is a home, not a "house" or "property" or an "investment".

Sure, my post is full of assumptions about you, your gambling habits, and the spoiled brats you are raising - but because I own and don't rent it seems that gives me the right to get on a high horse to deride and lecture people that I am making assumptions about.

[HULK_I6T]

Originally Posted by Iggle Piggle

Sounds to me what he will have to show for it all is well adjusted, motivated and respectful kids that were brought up knowing the value of both hard work and a dollar.

Some might say spending time at the $100 a hand black jack table also comes at the expense of your children's future - you know, disposable income to spend on your own treats...but then you did say you've sacrificed only a little. No matter what you leave for your children, if their upbringing has them turn out anything like yourself they will resent you for sacrificing only a little and ****ing away their entitlement at the $100 a hand table. Sure, you know you can afford it and still give them a start in life, but money donated to the casino is "dead money".

.

How is having nothing to show for your work teaching the kids the value of hard work and a dollar? The parent needs to be a good example in this regard. You cant expect your children to go out and strive to make a good life for themselves if the parent has nothing to show for themselves as the example. To teach your children good life skills you need to lead by example, not say "do as I say but not as I do"..

Oh and we come out ahead at the casino $100 a hand blackjack so I didnt donate anything to the casino, in fact they paid for my night out.

[Iggle Piggle]

What do you mean "nothing to show". You see him say he does not have the sort of assets that you find desirable but he can live without, so you think he has nothing.

I see him say chasing money had him miserable, so am assuming the changes he has made means he is no longer miserable. I see him talk of re-training to be of benefit to society. Put simply, I see him as more rich than you in the things that really count in life.

And re the casino paying for your night out...problem gamblers only ever talk about their wins.

[HULK_I6T]

Unfortunately money makes the world go round. Life is good to people who have money and hard on people who dont. To live costs money, to live a better life costs more.

Should it be this way? Probably not but it is the case. The sooner people accept that then they can get on with bettering their position long term, bettering their childrens prospects, long term. Not living hand to mouth, pay packet to pay packet.

For instance who wouldnt want to live in a mansion up on a hill with 180 degrees water views, across from the beach and 2 minutes stroll to work. (if you even need to work). Who wouldnt want a cleaner to clean the house so you have more free time to do what you enjoy. This all requires money!!

So unfortunately people are measured in society by "what are they worth", in other words "what can they show for their work". If you cant show much then your at the bottom.

Its just the way the world works. Not my doing.

[SantoAU]

Originally Posted by f6_benito

If you have nothing to show for your work, how will this be honourable?

You Sir, are at best a troll, or just straight up an idiot.

Nothing material to show for my work, there's the difference. My eldest children understand the value of hard work - they already have part-time jobs at the ages of 14 and 12. By your line of reasoning I should throw in this nursing study caper, and go back to the mines where I can earn a squillion dollars, miss my youngest child growing up (which I did to his older siblings) and in the words of Tracey Chapman:

"Consume more than you need
This is the dream
Make you pauper
Or make you queen
I won't die lonely
I'll have it all prearranged
A grave that's deep and wide enough
For me and all my mountains o' things"

My parents continue to work in their late 50's and 60's. Do I demand that they continue to provide for me? If we're making wild assumptions here I would suggest that your children are going to perpetuate the spoiled brat mentality that you clearly display in your posts.

By all means continue to tell me I'm wrong

[ILLaViTaR]

Not if you grow drugs or negative gear.

Hard to tell which one is more unethical though to be honest but when you factor in most people in this country somehow jew their investment properties as "their PPOR" despite having more than 1 property to dodge capital gains and rort themselves some middle class welfare/pension etc that they ridicule the sick/disabled for receivng. Suddenly as far as ethics go growing drugs doesn't look so bad I think I'll do that when I buy a house one day. Not that I or my generation have a choice but the idealogy of freedom is nice.

I'm also being half serious by the way, besides drugs/brothel and negative gearing/capital gains how else can you generate profit from a property? These are things my generation won't be joking about in 10yrs.

[HULK_I6T]

It seems the flavour of the posts is that the renters get defensive of their lifestyle and take exception to home owners offering financial advice.

The homeowners each tell stories of when they bought and how much $$ was made.

Anyhow I wont contribute further, what people decide to do they will either benefit or lose in the long run. But its a good discussion.

[creative]

I didnt get defensive... in fact just the opposite. I just dont agree with the elitism that you, as an example, seem to think that somehow as I havent purchased property I am a failure to my future generation. I might have a million quid in the bank whilst yours is tied up in property, you just cant assume. I am also pretty sure this age old comment of its only going to get harder for future generations has been around since, well, houses were first built. Its a moot point! Bet your parents and grandparents all said the same.

Its this assumption that gets on my wick that a renter is a lower part of society than someone who has purchased a house.

[Iggle Piggle]

I'm not a renter I am purchasing my house - I just think that telling someone they will be a disappointment to their kids is one of the lowest insults that can be levelled at a bloke, and you should only level such an accusation when it is truly warranted and deserved.

Add to that accusations that they are not setting a good example to their kids, and that they are not honourable.

But then reading back I see you are just spinning crap to get a reaction...I should have realised earlier that you were talking crap when in your casino story you mentioned having a mate.

[xxx000]

Originally Posted by f6_benito

I was at casino last sat with a mate, playing blackjack on a $100 minimum hand table. luckily we won but if we didnt, it was money we were willing to lose in the name of entertainment. Would have walked away ok with it and still enjoyed the night. We do it a few times a year max, because we can.

There would have been more than a few people in the casino playing with their rent money. Living hand to mouth, Basically win or bust.

it was funny the amount of people that sat at the $100 table for one hand, done their dough, then walked away with an egg on their head, barely warmed the seat. It was obvious they didnt have the money to play and you could feel their pain when the dealer sunk em.

My question is are renters actually doing the financial analysis of buy vs rent? Or are they just living for today?

Even as a home owner I find your sweeping negative generalisations about renters quite staggering.
But then I've also been amazed by your unfounded fears about opening your resort room door at night in Fiji and contrasting that your unbridled trust in a stranger in Thailand that led you to a less than pleasant situation.

[blueoval]

I can see this thread not lasting much longer.

Sad really, as some of the information given was insightful.

[TheZHLANE]

23 yo here, paid 460k for a 3x2 SOR perth. average suburb. mortgage is $600+ a week, i surely dont regret it, beats paying $500 a week in the same area for rent.

[HULK_I6T]

We should present our respective cases to Mark Bouris for his determination.

What do you think the view of Mark Bouris would be?

http://www.theage.com.au/money/inves...130-2yii1.html

[HULK_I6T]

Originally Posted by Iggle Piggle

I'm not a renter I am purchasing my house - I just think that telling someone they will be a disappointment to their kids is one of the lowest insults that can be levelled at a bloke, and you should only level such an accusation when it is truly warranted and deserved.

Add to that accusations that they are not setting a good example to their kids, and that they are not honourable.

.

Im making no such accusations. Apology to anyone who may think that.

I just said if your kid asks you one day what you have to show for all your hard work, you dont want to be holding out empty hands. There is still time to turn it around as our best years are ahead of us. This question may come off the back of you drilling your kid to stay in school or to make something of themselves. They will always have that retort in their top pocket.

[BENT_8]

Originally Posted by f6_benito

Im making no such accusations. Apology to anyone who may think that.

I just said if your kid asks you one day what you have to show for all your hard work, you dont want to be holding out empty hands. There is still time to turn it around as our best years are ahead of us. This question may come off the back of you drilling your kid to stay in school or to make something of themselves. They will always have that retort in their top pocket.

Yes you are, and you enjoy it.

My post on the first page was directed at people like you.
You don't just offer your angle, you drive it down peoples throats post after post.

What would I say if my kids ever ask what I have to show them, nothing, as they wouldn't be so rude as to enquire in the first place.

[HULK_I6T]

Originally Posted by BENT_8

Yes you are, and you enjoy it.

My post on the first page was directed at people like you.
You don't just offer your angle, you drive it down peoples throats post after post.

What would I say if my kids ever ask what I have to show them, nothing, as they wouldn't be so rude as to enquire in the first place.

Lets put it into perspective. Its a question posted in the bar, a good bit of debate.

Do you think I honestly care who rents and who owns their houses? I dont care, I dont go knocking on doors down my street trying to convince renters to buy? I have no interest driving my points down anyones throat. Just participating in the discussion, good friendly debate.

Beleive me, Id have a beer with anyone on here, renter or home owner, I respect everyone who participates even if they disagree with me and Mark Bouris.