Renting Or Buying

[SCRIBR]

renting does have it's short term benefits ,more money to live with no outlay for things that wear out ,but I think unless your banking that extra money your saving, in the long term buying property will get you further

buy buy buy!

1 question: Can you afford to pay rent when you're retired? Because you will be renting until you kick the bucket.

[Dagabond]

Thats the way I originally thought about it tmac but lately I've been wondering if its really worth it....here today gone tomorrow cant take it with me etc...

Oddly enough, my mate was on A Current Affair last night for his property pursuits.

3.8Million....in debt....

We bought our house 6 years ago for 250,000 even. We have spent a maximum of 15,000 on it in that time and it was revalued at 589,000 in January this year!!

Keep up the mortgage and you will be much better off in the future.

People keep saying this but to buy the same house NOW you'd be looking at 589,000 so theres no real gain...the price of the house has gone up whether you own it or not....

Or am I missing the bigger picture....

[Dillz]

Well it's pretty much all been said Dags, all I will add is that if you buy smart you will always be in front.

You will never own a rental, you are just paying for someone else's retirement. Property is a great way to build wealth if it is done right but unfortunately alot of average Australians have done it the wrong way either off their own back or have received bad advice and are now paying off a mortgage on a property in which they will see minimal capital gains when they sell. Add a few interest rates hikes and they are in more trouble then they really should be.

[senna_T]

personally at the moment I can't afford to buy a house, I save as much as I can, but the cost of buying a house in sydney is absolutely rediculous. I have taken over the lease from my mother who has since moved somewhere else, I've lived in this house for 10yrs and have a good relationship with the owner, in another year I will probably try and buy the town house from him (after we get the real estate to fix a few things - ssshhh)

[Fat-Tony]

Houses are too expensive at the moment and interest rates are too high to justify sinking money into it, unless its real cheap. Renting is also handy due to the fact that you are not tied down to a mortgage for 30 years where you can move anywhere and do anything as opposed to being tied down in a job you don't like and live in an area where your neighbors are a bunch of morons. There are a lot of people out there now who have built up some nice equity in a house thanks to the price increase but ultimately I somehow doubt we will continue to see the price of real estate boom as it has been.

To rent of buy, well not worth buying unless you are happy with your position in life, but that said even if you were to buy I dare say its worth waiting until some banks start selling houses that people can't afford to pay anymore and you might get something cheap.

My 2 cents.

[Dillz]

Something to keep in ming before you jump head first into the rental market.

MELBOURNE'S rental property drought has hit crisis levels after last month's vacancy rate fell below 1% for the first time on record. Rental accommodation in the central city has almost dwindled to zero.

Figures obtained by The Age reveal that the vacancy rate across Melbourne is 0.9%, a level not seen by the property industry since records began in the early 1980s.

For those wishing to live close to the city the situation is even more dire. The Real Estate Institute of Victoria says that, within four kilometres of the CBD, the vacancy rate dived to 0.5% last month. It was 0.6% in February last year.

"A rental vacancy rate below 1% is unprecedented," said REIV chief executive Enzo Raimondo, "and it increases the urgency for governments to take action to increase public and private investment in rental stock."

The surging demand for rental properties in Melbourne, particularly close to the city, is being fuelled by the state's growing population. About 1500 people are moving to Melbourne each week and experts predict that the city's population will hit 6.2 million by 2020, a decade earlier than forecast earlier. The State Government's Office of Housing has reported that median rents in metropolitan Melbourne rose 12.7% in the year to the September quarter.

The Full Story

[our06t]

that's the way I originally thought about it tmac but lately I've been wondering if its really worth it....here today gone tomorrow cant take it with me etc...

3.8Million....in debt....

People keep saying this but to buy the same house NOW you'd be looking at 589,000 so theres no real gain...the price of the house has gone up whether you own it or not....

Or am I missing the bigger picture....

you probably wouldn't buy one at that price , but try get something in the same area that needs a little work pay say $400,000 and in another 6-10yrs it'll probably be worth 650,000

prices will always go up and down but over the long term they will always go up just don't sell when the markets down

iv'e had friends sell their house at the peek of property prices and then they rented for 2years and bought a place in the same area for less when prices went down and pocketed a nice sum of cash

[Kimberley Scott]

Dags

If you have some equity in the house you are currently buying, you could realistically sell and invest the capital gain (tax man will take some), you would have to be strict though. You could then rent that unit and have a better quality of life, in where you live and increased cash flow.

Picture will be rosy for the short term say 18 mouths, after that its a unknown.

Scotty

[Maximus]

If you have the discipline to invest the money that would be going into a mortgage while you are renting, there isn't much difference in where you will end up financially in 30 years. Unfortunately I have never met anyone who has that discipline.

Agreed totally. Look at some of the older folk (40-50yrs old) that are still renting.

They could have bought a house 20-30 years ago for $50K. Even less depending on location.

Most of theose people now sure as hell dont have $1Million put away that they have saved by renting and still have nothing to show for it after all these years.

In the short term renting at $300 a week might look better than paying $1000 a fortnight into a mortgage but in the long run you cant go wrong buying a house.

[Flukey]

There's a house-unit at the end of my street that has got me wondering why I'm paying a mortgage, it's got an extra bedroom is only about 5 years old compared to my 20 year old joint and a double garage, not much of a garden just a flat lawn really but its double the size of my backyard. The weekly rent on it would be half of what I'm paying now....

So its got me wondering why am I payin through the ring for something I'll probably never own anyway...

Timely topic Dags as it kept me awake last night.

If I sold my house today and went and rented, I would have a fair whack of cash in the bank and zero debt, where as my current place will take me 10 years to pay off.

I am not sure its the best thing anymore to own your own home

The upside is if you can get the house paid off quickly, then you live rent free.