All Topics / General Property / Rent, don’t buy

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  • Profile photo of supermansuperman
    Member
    @superman
    Join Date: 2003
    Post Count: 53

    http://www.finance.news.com.au/story/0,10166,12623034-31037,00.html

    Hmmm it’s a turn around from a few years ago isn’t it [biggrin]

    It’s been my plan for a while… when we get back we’ll rent until the imputed rental return of owning equates to a sensible investment. I hope the market corrects itself quickly because I do enjoy owning. Although this damn record breaking rain over here (you might have seen mudslide reports?) has been stressful with our rather aged roof.

    I love hearing the naive, “throwing money down the drain” argument against renting [specool]. It thoroughly amuses me. If one doesn’t have the discipline to invest the difference between mortgage, rates, etc. and rent, then they might be better off buying.

    For us, the investment portfolio we saved while renting for 18 months, roughly equals the cash we will pocket on our home sale next month, having owned for the last 18 months. Yes we caught the best year ever for the CA RE market! The shares were geared, but the property even more so! Point being… we broke even with renting, with the RE market booming, certainly it’s not a huge leap to think we could do better renting with the market in limbo.

    N.B. Cash in hand is after sales commissions and the stock market has performed wonderfully of late. But the property market has done even better! Just all goes to show again, there are plenty of ways to skin a cat. I think the RE market was driven too far by people not understanding this concept.

    Profile photo of Fast LaneFast Lane
    Member
    @fast-lane
    Join Date: 2004
    Post Count: 527

    Yes definately, great post. You get a lot more bang for your buck renting at the moment, that’s (like you said) if you can ignore the ‘throwing money down the drain attitude’.
    If you can amass an investing warchest while renting and put it to good use, well bugger it, I’d live in a shipping container!

    Profile photo of Don NicolussiDon Nicolussi
    Participant
    @don
    Join Date: 2005
    Post Count: 1,086

    Hi Superman,

    We would have to agree with you on this one. It can be a huge lifestyle choice to rent. We have lived in places that we could never have afforded to own and managed to save money for investing at the same time.

    Don Nicolussi | Property Fan
    Email Me | Phone Me

    Learning, having fun and doing it!

    Profile photo of foundationfoundation
    Member
    @foundation
    Join Date: 2005
    Post Count: 1,153
    I think the RE market was driven too far by people not understanding this concept.

    I agree.

    We have lived in places that we could never have afforded to own

    I agree. (Try a 1.5m property for $127 pw![biggrin])

    You get a lot more bang for your buck renting at the moment

    I agree.

    At some point buying will again return to its historic norm position slightly above the cost of renting. This may occur by price stagnation for many years until wages / rents catch up or quickly with a price crash. Either way, I’ve better things to do with my hard earned for the moment!
    Cheers, F.[cowboy2]

    Profile photo of MiniMogulMiniMogul
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    @minimogul
    Join Date: 2002
    Post Count: 1,414

    Oh, quite. Am paying landlord 2-3 percent yield to rent an 800k property.

    Am purchasing in NZ instead and getting huge yields and CG’s. Income from NZ is more than paying the rent on Sydney home. If I had put the deposit down and bought the Syd property instead I would be broke, stressed, overworked and maxed out in a market where prices are going nowhere fast. Instead I am financially free in 2 short years with several properties and ventures, and I still get to live in the 800k house.

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