Renting Or Buying

[Maximus]

Cant see the point of 70% of my wages paying off a house either. Doesnt leave you all too much to live a decent life.

I see it all the time. People say they cant afford to buy a house but go out for dinner 2-3 times a week, smoke, drink and all in all are really living it up.

Just by cutting back buying lunch every day at work you can easily put an EXTRA $50 into the mortgage. That doesn't sound like much but over the term of the load every extra $1 you put in you save $2 in interest.

You need to make some sacrifices to buy a house in todays market or earn a shed load of money.

[R-SPEC]

It's not hard to buy a house if you're renting with no deposit. People live within their means. Doesn't matter if they earn $50k or $150k a year, they'll live with what they've got, provided they can budget properly.

If you have no deposit, often the best way to get into a property is to take out a personal loan for 5% of the property value, and borrow 95% from the bank. Pay interest only on the mortgauge for the first 5 years or however long it takes to wipe out the personal loan. Then once it's gone you can start paying some principle, and over those 5 years your captial growth is almost 50% (based on house prices doubling every 9.3 years as per stats) of what you paid.

Very, very loose example:

$300,000 property

95% finance = $285,000

5% or so Personal Loan = $15,000

First home owners grant goes towards stamp duty and excess is splashed onto person loan. 5 or 6 years later the property is worth is excess of $450,000. This provides much more financial security than paying someone else's mortgauge. Rent is 100% interest!

P.S. I bet you can't tell what I sell lol

Edited 12/04/08 02:14 AM by R-SPEC

[Craig.]

Mate I live 45mins west of brissy. Not the best area I know but its a start. Prices are cheap out here but its just a start for me. Like others have said I can move up in a few years time.

As with the cyclone rating. It would only add say 10 -20k to a house max. So on the scheme of things whats that on a average house to build of 200k. nothing.

Nothing wrong with tha that area mate. You have your foot in the door of the property market and its close enough to town that you wont lose money on your investment.Smart buying! I figured it was a low priced area though as there aren't too many 25yo home owners in dearer areas.

Yeah cyclone rating in Bris would be 10-20K in Brissy.

Up here you just need to add 25% to Brisbane prices for all materials as nothing is able to be sourced locally. Transport is a killer.

Wages for anyone in the buiding industry are also 25% higher because if they weren't, everyone would just work in the mines instead and there would be no building industry.

Edited 12/04/08 02:16 AM by craiginmackay

[Grudgee]

This isn't a stab at anyone here, just a general statement about the people I work with and some of my mates.

I shake my head at people complaining about how property is too dear for them to buy and it's not fair, blah blah. Stop f*cking sooking. Get out there and do something about getting where you want to be. Our generation has had it so f*cking easy and has bred a massive bunch of me-first greed mongers who expect it all on a silver platter.

We live in an amazing country and are better off than 98% of the other people in the world, yet we bitch about not being able to keep up with the Jones'? If you want something, work your arse off to get it, or be happy without it. If you don't want to work hard, work smart. If you don't want to do either, be content where you're at.

Don't get me wrong, in the scheme of things, I've also complained about trivial things, but a good wake-up call never hurts. We've got it good. If you want it better, work towards getting it.

[XRPete]

cheers. The area I've bought in is supposed to be in the "urban footprint" of the western corridor which is the huge area being developed in and around(west) of brisbane. I'm currently living in one house and bought a block that's about 2km away from my house. had the block since I was 20 and bought the house 9 mths ago. the blocks worth about 140k now and I only owe 60k on it now. so my first rental won't be far away I hope. I'm real happy with my investments. And to think I was going to sell it to buy and xr6t.........

Maybe I should come up to mackay for the coin.

[ktford]

This isn't a stab at anyone here, just a general statement about the people I work with and some of my mates.

I shake my head at people complaining about how property is too dear for them to buy and it's not fair, blah blah. Stop f*cking sooking. Get out there and do something about getting where you want to be. Our generation has had it so f*cking easy and has bred a massive bunch of me-first greed mongers who expect it all on a silver platter.

We live in an amazing country and are better off than 98% of the other people in the world, yet we bitch about not being able to keep up with the Jones'? If you want something, work your arse off to get it, or be happy without it. If you don't want to work hard, work smart. If you don't want to do either, be content where you're at.

Don't get me wrong, in the scheme of things, I've also complained about trivial things, but a good wake-up call never hurts. We've got it good. If you want it better, work towards getting it.

I'd like very much for you to chat with Lumpy sometime, though it sounds like you may work with him, LOL

[Flukey]

Very, very loose example:

$300,000 property

95% finance = $285,000

5% or so Personal Loan = $15,000

First home owners grant goes towards stamp duty and excess is splashed onto person loan. 5 or 6 years later the property is worth is excess of $450,000. This provides much more financial security than paying someone else's mortgauge. Rent is 100% interest!

P.S. I bet you can't tell what I sell lol

I would never ever recommend someone finance 100% of their home.

That is a good example of what has happened in the US. People have borrowed 100% of the value of their homes, expecting they would be OK, but along came a recession.

Many people losing their homes, and the sale value not matching what is owed on the property.

In the US people dont go bankrupt and can effectively walk away from a failed purchase. In Oz, it can haunt you for years.

Easy for me to say I know because my debt is only 30% of my home value and easily managed.

I agree for young people buying into the market today it would be terrifying.

If you are deperate to buy a home, look at Melton or some of the outer suburbs.

[jetute]

rent or buy??

its a bit like asking if you should fly or swim to thailand.

[R-SPEC]

I don't get it? Why don't you just walk?

Edited 12/04/08 07:00 AM by Dagabond

[Craig.]

Maybe I should come up to mackay for the coin.

Yeah a lot of guys come up for that reason.

A lot leave town soon after too (within 3 months), when they cant find a rental property and realise the cost of living is higher than where they came from. It is a very transient town.

If you have somewhere cheap to live (share accom or a caravan) it could be an ideal opportunity though.