Renting vs Buying

[am Bays]

I thought this was going to be anohter Salary cap thread and further comment on Norwood buying the 2012-14 premierships.

As a Bays fan I'd settle for renting a premiership....

Now, how are going to come up with the bond?

We'll get the SANFL to take out a loan to cover it

[Lightning McQueen]

I think of it similar to a work car vs a car allowance...

A work provided car is the same as renting, set package, no hidden costs, no unplanned extra's, nearly 100% hassle free - But when its done, you walk away with nothing!

A Car Allowance is like buying, sometimes works out a little cheaper per month, but may incur some unplanned costs along the way that you have to fork out, however, when its done it's yours.

This is where it comes down to planning and choice, if you can put away the same amount each week, but there's obviously a little left over in the buying example, that little bit should cover any unexpected issues that arise, and if none do over a year, consider it a saving plan.


In the car example I look at it this way.... If work are going to spend $20k per year on a car for me (either through their own fleet with costs or pay me an allowance), would I like to walk away from the company in 5 years time empty handed, or with a car thats mine as a parting gift... pretty simple answer IMO provided the take home pay doesn't actually change.

And I reckon the same goes for buying/renting... If your going to (and can afford to) spend $X every month on one of either rent or mortgage, would rather end up with nothing in your possession in 20 years or end up with a house that's yours???

The other option is to do both.

Lightning, if your struggling with your own place, why don't you rent it out, making sure rental price covers mortgage plus a little extra in case you need to get something fixed, and then go and rent something yourself and a cheaper price point. Then you actually are saving money in your pocket each week and still end up with a house in 20 years???

I'm not struggling with my own place, I sense that I will be in the future with my kids making representative sides etc. and there's not a lot of free cash after the bills are paid.

The difference I'll make between what I owe and what I should get for the place will be very handy at this time of my life and I won't need to stress about anything going wrong with the place or how will I cover the costs of having to travel interstate for sporting events the kids may get selected to play in.

My hot water system shat itself right on Easter and it set me back $1300, it wasn't a big deal but it was enough for me to wonder if it's all worth it right now.

[Dog_ger2]

bought my place $82,500

$315,000 conservative now.

It's mine. Free rent. Cheap rates. Doing it up to sell it.

Can't do that with rental..

[Q.]

bought my place $82,500

$315,000 conservative now.

It's mine. Free rent. Cheap rates. Doing it up to sell it.

Can't do that with rental..

Not really applicable in the current economic climate

You're making the false assumption that house prices will continue to climb at the same rate over the same period

[mighty_tiger_79]

We purchased. Got in when the first home owners grant was available.
As with the majority of owners we went through rent/mortgage stress.
Now in a position where we have a low mortgage to help overcome any issues such as a hot water service that went about 3 weeks ago and can also do renno's to the house for our liking.
Just in the final stages of having an outdoor pergola being put up.

It was a shock when we went from $340 fortnight rent to $900 f/n mortgage. But the rental even though cheap we got a lack of assistance from the owner and the property manager.

I would say owning, but everyone's situation is different and you make whatever situation you are in work to your advantage.

[Mickyj]

Ok my situation might be changing I'm still on incapacitated benefits will be trying for disability .
And a court case has started on me due to my accident has started the trial begins August September the tribunal couldn't agree so that's my life with therapy one to three times a week .
So way back when I was first married I got a first home owners Loan.
At the end stage I got all but 20 grand paid off the house .
I think in 21 years we went through 3 hot water heaters .
My big issue I was the only one working up keep I couldn't do .
For some reason my wages didn't really go far .
That included no holidays away which were just to the river land after a few years .
So when my marriage ended just before the divorce we managed to sell the house .
I wasn't sure what to do so I rented . Being a low paid worker I got lucky rent a place from a charity I think some call it community housing .
First visit at a rental I was told you'd earn too much then when I said what I earned I'd get a different house .
But they checked on me I'd been working there longer than my boss so I got the house which is way better than the place i tried to buy .
At work I had people going off at me I must rebuy I was almost 50 then now I'm 53 .
Going back I was a bit in shock . But I went to my then credit union once they learned how little I earned I needed in my pocket over 100 grand . Because even though I was a long time employee I am considered a credit risk .
Walked around the corner Bendigo bank they would only loan to me if I took the first home owners loan actually both did .
Neither could tell me if I could seeing I'd already been a first home loan buyer before .
I think for me at 53 low paid worker or even lower now renting
Don't believe when people tell you wages go up over the years

[Lightning McQueen]

bought my place $82,500

$315,000 conservative now.

It's mine. Free rent. Cheap rates. Doing it up to sell it.

Can't do that with rental..

Yeah mate, it is the Australian dream, broken marriage, starting again, single parent with kids that need to be able to fly interstate means that I cannot fulfill that dream.

For now I'd prefer to live in a new house with no stressors or overheads with money in my pocket.

Perhaps if I chose a better person to spend my life with who had the same morals as I did I wouldn't be too far off paying my house off either, I can sit around and complain about what I don't have or I can appreciate what I do have and work with that.

[Q.]

I reckon you've made the right move LM, buying a house that is. Good things do not come easy.

[Mickyj]

bought my place $82,500

$315,000 conservative now.

It's mine. Free rent. Cheap rates. Doing it up to sell it.

Can't do that with rental..

Yeah mate, it is the Australian dream, broken marriage, starting again, single parent with kids that need to be able to fly interstate means that I cannot fulfill that dream.

For now I'd prefer to live in a new house with no stressors or overheads with money in my pocket.

Perhaps if I chose a better person to spend my life with who had the same morals as I did I wouldn't be too far off paying my house off either, I can sit around and complain about what I don't have or I can appreciate what I do have and work with that.

Which is what I've been doing same job 21 years the banks think low paid workers are a risk.
I do as im told leave after 8 hours of doing basically the same thing every minute every hour every day every week every month .
I was raised you see money on the ground you walk over hot coals to pick it up .
I have no issues with people buying houses .
My issue I did the right thing and got me nowhere that's life I keep going .
I don't drink or smoke or do illegal drugs me I go flick a lure catch a fish enjoy myself .
Do you know the lectures I got at work for doing something like that in my time .

Honestly I'd enjoy owning land again
But if it's too hard causes issues due to no money
I'm better off renting
Work now that's another story

[The Ash Man]

I had a similar situation LM.
Had to decide after a break up whether to "re-buy" my house or sell it and rent somewhere for a while.
I decided to "re-buy" on my single income as it was a constant for my son and I wasn't going to be on the rent merry-go-round.
Now he will go to school near "my" house as I wont be moving every 12 months when a lease runs out.

[Corona Man]

bought my place $82,500

$315,000 conservative now.

It's mine. Free rent. Cheap rates. Doing it up to sell it.

Can't do that with rental..

Yeah mate, it is the Australian dream, broken marriage, starting again, single parent with kids that need to be able to fly interstate means that I cannot fulfill that dream.

For now I'd prefer to live in a new house with no stressors or overheads with money in my pocket.

Perhaps if I chose a better person to spend my life with who had the same morals as I did I wouldn't be too far off paying my house off either, I can sit around and complain about what I don't have or I can appreciate what I do have and work with that.

There is your problem - old saying - if it flys, floats or ***** - you're better off renting!

[Lightning McQueen]

I reckon you've made the right move LM, buying a house that is. Good things do not come easy.

I bought 12 months ago, I wish I hadn't now. I'm a $40 cab fare from anywhere and my cash flow was soaked up on the deposit.

[Lightning McQueen]

Which is what I've been doing same job 21 years the banks think low paid workers are a risk.
I do as im told leave after 8 hours of doing basically the same thing every minute every hour every day every week every month .
I was raised you see money on the ground you walk over hot coals to pick it up .
I have no issues with people buying houses .
My issue I did the right thing and got me nowhere that's life I keep going .
I don't drink or smoke or do illegal drugs me I go flick a lure catch a fish enjoy myself .
Do you know the lectures I got at work for doing something like that in my time .

Honestly I'd enjoy owning land again
But if it's too hard causes issues due to no money
I'm better off renting
Work now that's another story

Life is meant to be enjoyable, not a chore, I'm only here once so I'd rather be happy.

[LaughingKookaburra]

It's definitely an interesting debate.

I bought my unit as an single bloke in 2009 on the very last day banks did 100% loans. At the time it was also double the first home buyers grant. I literally walked in, applied for a loan and got given a unit and $4000 cash in hand (residual from grant) by the bank with no savings....

I then moved to Perth in 2011 for just over 3 years. I rented it out using an agency. What an absolute head **** that was. During that time I had 2 runners which was the easy part. I then had an Indian bloke who decided his life was too hard, got pissed, set his couch on fire and then laid on his bed to die. Unfortunately he survived and told the fire fighters who rescued him that he tried to kill himself. Once he sobered up he then denied this and then by the letter of the law was able to go to the cop shop and get the keys back once discharged from hospital. He tried cleaning it up but he caused $90,000 worth of damage and gave up after 10 minutes by the looks and then dumped all his charred items on strata land. I was then charged to remove these items. He got off Scott free with no charge no matter how hard I pushed as there was no proof he deliberately started it, it was deemed accidental. Luckily I was insured but the insurance company's quality control whilst repairing was an absolute disgrace. Toughest 12 months of my life mainly because I was from a far away distance and couldn't just take over it myself. It's still an investment today.

Fast forward I'm selling that unit (fantastic inside, surrounding environment ordinary) and buying elsewhere to live in with the other half. **** investment properties and if you see me on the news one day for killing an Indian bloke you'll all know it's not a race motivated crime

[Lightning McQueen]

I had a similar situation LM.
Had to decide after a break up whether to "re-buy" my house or sell it and rent somewhere for a while.
I decided to "re-buy" on my single income as it was a constant for my son and I wasn't going to be on the rent merry-go-round.
Now he will go to school near "my" house as I wont be moving every 12 months when a lease runs out.

I bought in the wrong area and intended on having it for a short term doing a few things to it and making some profit.

I didn't take into consideration that I'd be lumbered the extra costs that have been coming in for kids sports so I can either just exist from month to month or have a life.

Your wage is probably more attractive than mine, I've gotta keep my mouth shut at work and hopefully work my way up the rungs a bit.

[Lightning McQueen]

There is your problem - old saying - if it flys, floats or ***** - you're better off renting!

Yeah mate, I've lived and learnt.

[Lightning McQueen]

It's definitely an interesting debate.

I bought my unit as an single bloke in 2009 on the very last day banks did 100% loans. At the time it was also double the first home buyers grant. I literally walked in, applied for a loan and got given a unit and $4000 cash in hand (residual from grant) by the bank with no savings....

I then moved to Perth in 2011 for just over 3 years. I rented it out using an agency. What an absolute head **** that was. During that time I had 2 runners which was the easy part. I then had an Indian bloke who decided his life was too hard, got pissed, set his couch on fire and then laid on his bed to die. Unfortunately he survived and told the fire fighters who rescued him that he tried to kill himself. Once he sobered up he then denied this and then by the letter of the law was able to go to the cop shop and get the keys back once discharged from hospital. He tried cleaning it up but he caused $90,000 worth of damage and gave up after 10 minutes by the looks and then dumped all his charred items on strata land. I was then charged to remove these items. He got off Scott free with no charge no matter how hard I pushed as there was no proof he deliberately started it, it was deemed accidental. Luckily I was insured but the insurance company's quality control whilst repairing was an absolute disgrace. Toughest 12 months of my life mainly because I was from a far away distance and couldn't just take over it myself. It's still an investment today.

Fast forward I'm selling that unit (fantastic inside, surrounding environment ordinary) and buying elsewhere to live in with the other half. **** investment properties and if you see me on the news one day for killing an Indian bloke you'll all know it's not a race motivated crime

A double income coming makes a world of difference when buying. I want to be able to travel and do things, I've messed my life up a bit over the years but have no regrets, I'm happy.

[Mickyj]

Which is what I've been doing same job 21 years the banks think low paid workers are a risk.
I do as im told leave after 8 hours of doing basically the same thing every minute every hour every day every week every month .
I was raised you see money on the ground you walk over hot coals to pick it up .
I have no issues with people buying houses .
My issue I did the right thing and got me nowhere that's life I keep going .
I don't drink or smoke or do illegal drugs me I go flick a lure catch a fish enjoy myself .
Do you know the lectures I got at work for doing something like that in my time .

Honestly I'd enjoy owning land again
But if it's too hard causes issues due to no money
I'm better off renting
Work now that's another story

Life is meant to be enjoyable, not a chore, I'm only here once so I'd rather be happy.

After what happened to me in October your totally right .
Now I gotta get threw therapy and a court case my employer and their insurer are taking me so they win .
I'd accept its not work cover but seems they need a court case to prove it . They won't let me go back to work if I'm not 100 percent ( I think some stuff is gone for ever like smell and taste not certain I'll be let to drive again with head spins forklifts I'm legally able to drive go figure )
As I'm a liability but they complain I'm not working to them it's unfair I'm on unpaid leave .
Me I'd be better on the dole not money wise but stress .

Rehab telling me it's time to join a job network after I'd almost collapsed on another therapist .
But your not on work cover except for the court trial
And they are saying no to disability
But the reason I'm getting head spins yeah right

That's enough lol
Life's too short

[Booney]

On the topic, I truly feel for any young person or persons who are looking to enter into the homeowners market in the future.

With a modest home above $350,000 and banks not willing to loan more than 90% ( some less ) of the homes value, young people or couples trying to save some $40,000 or more to have the deposit on a home must seem insurmountable to many. It would be.

I know I've been pretty lucky to have purchased my first home where and when I did, making a pretty significant gain in the process.

[Mickyj]

On the topic, I truly feel for any young person or persons who are looking to enter into the homeowners market in the future.

With a modest home above $350,000 and banks not willing to loan more than 90% ( some less ) of the homes value, young people or couples trying to save some $40,000 or more to have the deposit on a home must seem insurmountable to many. It would be.

I know I've been pretty lucky to have purchased my first home where and when I did, making a pretty significant gain in the process.

That's what threw me the second time my wage .
First time they laughed and put me on the first home buyers loan .
Second time they wanted me to front up with 100 grand
And told me then at 16 or 17 years in the one job I am a credit risk