For someone getting into the property market , or planning to start property investment
This pdf file will give you some insight into why you should rent or buy a property
According to this 2012 report there are 1,975 suburbs in which you can invest by Servicing an interest only loan on a variable mortgage rate and there are 674 suburbs in Australia where you can invest servicing a principal and interest loan on a three year fixed mortgage rate ( which means you get more equity while the loan is getting paid off as well)
Here is the pdf file
http://media2.apnonline.com.au/img/media/pdf/RP_Data_Buy_vs_Rent_Report_Oct_2012_FINAL.pdf
Good luck iwth investing !!
CHeers'
Jeff
My view is if you are staring off rather than buy a first home I would rent and buy an investment property.
Firstly when you buy an investment you can take 80% of the projected rent into the servicing of the loan, in other words you can buy a better property than you could afford to live in.
Often you can also afford to rent a property that you could not afford to buy. So this way you get to live in a better area and invest your money in a better property as well.
Although not everything is about money their is no doubt that financially it makes a lot more sense to buy an investment and rent yourself.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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I think a lot can depend on the state you live in and the type of property you're looking to purchase. There's some decent state govt. incentives out there that first home owners can take advantage of.
If finances permit – I'm a big fan of doing both. That is, purchasing the first home and getting into property investing. I've had quite a few young clients purchase their first home, renovate and then extract equity to purchase their first IP. Many of them repeat the same process and buy again.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
The median values used to calculate these things are never an accurate measure of prices for the particular area. I see it all the time.
I know for certain that for the median prices listed in this report, for the area I am familiar with, the 'median' property purchaser would struggle to buy a property at all, let alone one in a 'median' condition.
I'm with you Ricksta – I don't know how they come up with some of these figures.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Personally I would rather buy first (obviously not going to be your dream house!), and then renovate and add value, then use the equity to invest.
I think I would go nuts if I couldn't improve the house that I lived in. I have never rented though so probably a little biased.
Just seems like wasted money to me.
I agree. That's one thing I really enjoy about ownership – spending free time improving the property and knowing that it's probably adding some value.
There's also the freedom that ownership brings in terms of not having to worry about routine inspections or the chance of the lease not being renewed for whatever reason.
I understand that there's pros and cons with each approach but I've always had a personal preference towards owning rather than renting.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
i suppose this can work depending on what sort of property you pick as well and other factors
If i was to buy my first house and its equity increased to a reasonable level , i could either sell that property and upsize to a bigger property with that equity or then sell with less capital gains due to 2+ years and buy a bigger property
You dont always have to rent to make moneya nd increase your net worth.. though its an option that might suit some !!
cheers
jf
i surely would pick your strategy over nigels .. though as i said both could work, ive seen people invest both ways and be sucessful
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