Do you rent or own?

[King Nothing]

Your home, that is. I'm starting to look at my options for moving out of home and would like to see what everyone on here does. Between my and my g/f we earn around $100k (first year graduates) and have just shy of $40k saved up. Now we are trying to decide whether it is better to rent or to buy.

If we decide to buy, we would probably stay at home for another couple of years and save around $100k as a deposit for a place for something under $500k. We would most likely struggle for a few years and definatly not have enough money to start a family, let alone afford the time off work she would need. But in the long term we may be better off as we would have our own place.

On the other hand, if we decide to rent we will move out within the next 12 months or so, and have saved hopefullly around $50-70k. We would then rent for a few years whilst the money we save from the difference would be invested, and hopefully save around $150-200k over a few years. We would then be in a better position to buy a house with better salaries and more financial security. The disadvantage here though is the dead rent money. And the way the rental prices are going in Sydney at the moment is insane, it may even get to the stage where we would be better off with a mortgage!

So, what do you do? Whats your experiences and maybe even some advice? Oh and the poll should be anonymus, I ticked that box

[Hunter]

My partner and I rent an apartment at the moment, $320 a week for a shoebox. I can't see us buying a house in the forseeable future even though we want one.

[Smoke Pursuit]

Why not buy something a little more in your budget, say $350,000 and buy it now... You only need 5% deposit plus a little bit of mortgage insurance... Rent money is dead money, and the way homes are appreciating in value its only going to get harder to own one. Then one uve had it say 4 years and you have some equity through paying it off and it appreciation in value you can then upgrade to something bigger and more expensive, this is my plan neways although I already own an investment property.

Good luck!

[Dazza XLT]

Every situation is different of course.
We pay $1150 a month here, and I've had a gutful of paying off someone else's mortgage.
Not going to buy a place, as there's no value for money. If you can see the coast from any part of your home around here, you can ask whatever you want, no matter the condition of the existing home. We'll build instead!

I have a good income/deposit, and won't have a problem servicing the loan on my own.
My better half will begin teaching in 2 years, so our income will basically double.
I figure if we can easily afford the repayments on my wage, we might as well get into it now!

Once the second income comes on line, slam most of it into the first house. Get the first house paid off, and start on a second. And so on.
Thats the plan anyway!

As I said, every situation is different.
But as you said Rent money is dead money.

Cheers

Darran

[dave351cid]

renting at the moment but have bought a block of land and hope to build on it soon.

RENTING SUKS............

i have been in rented houses for the last 11 years and i hate it.
i had my own place before i moved to qld but when i moved i used my money to buy a business thinking i could save up and get into another house .

when you are paying rent it is very hard to save up, especially the way rent prices keep going up. you have no real long term security, when your lease is up you can be sent packing . i have mostly had to move every 2-3 years because the house has been sold and new owners want to move in.
your cant do any little mods to the place to make it suit you, some wont even let you put picture hooks .

you are still young so stay home for a bit longer and keep saving, it will be worth it in the end.

[merlin]

Rent money is dead money.

Captain Obvious at your service.

[Powdered Toast Man]

Renting.....

I'm single and earning less than the average aussie wage and paying off a car so buying a house is waaaay out of my financial reach. I mean my rent is only half of $560 per month now. There is no way I could afford the $1500 or so per month that paying off a house requires. I mean after I have finished paying off my car I should be able to save about 15 grand a year but that is still a couple of years away.

Would love to buy a house but what can ya do...

[digitalpunk]

I was in a similar boat as you a few months back. I decided that it would be better to rent first off, really just to get out of home and move in with my girlfriend to test the waters so to speak. We were talking about marriage and we decided to rent because you don't really know somebody until you live with them. We spent a lot of time around each other but living with somebody 24/7 is such a different experience. It has been 5 months now and we have had a few big arguments, once she went back to her mums for the afternoon, but we always resolve our issues and our relationship is stronger then ever. Another reason why I didn't want to get a house is because I wanted to enjoy my life while I am out of home for the first few years, I am in I.T., making decent money and will be starting a new job in 3 weeks where I will be earning about $15,000 more a year. I didn't want to get tied down with a mortgage just yet and still go and see plays, bands, movies, the footy and car shows etc without worrying about mortgage repayments, plus, if worse came to worse and me and my girlfriend broke up, then it is just a matter of me taking over the lease, which I would probably do. I don't like thinking about us breaking up, but we had to think of everything before we did anything.

We found a nice apartment in Newtown, I have lived just west of Parramatta all my life and I have always wanted to move to Glebe, Newtown or Erskinville, my girlfriend loves Newtown as well so we really targeted this area. I am 26, my girlfriend is 20 so I have been working longer then her, therefore, had a lot more saved up then her. I knew I would have to put more towards us buying furniture etc and had no problems with that as I would have moved out of home anyway even if she wasn't ready. Rent is always half/half.

Most of the money will go towards furnishing your place. I didn't realise how much we spent getting set up, we went to a lot of auctions to buy everything but it still cost a lot of money when you are starting from scratch.

Where are you looking to move to?

[blueoval]

just picked up a 3 bedroom villa south of adelaide which was built in 1990 for $179k. Which I thought was a steal. Ends up being $320 a week in repayments. Im gonna live in it for a little while then rent it out.

Im doing this on my wage alone. The mrs stays at home. We are living with sick in laws at the moment so we arent paying rent now.

If your gonna buy, I suggest you do it now!

[XR6_BABE]

Live down the south coast of N,S,W my Husband & I own our 6 bedroom home, i'm 30 & he's 32 semi retired now & loving the seachange...

[Lukeyson]

i pay $300 a week on the mortgage, avg rent here is that price.

[Mack 6]

I'm a single bloke on a decent wage and I just bought my own house. 273.000 it cost and mortgage is 1800 odd a month. I make it pretty easily at the moment. I am luck i don't have a car loan as well.. just means parts for the cars have to wait a little while longer to get.
Love the idea that every little thing i do to my house is benefitting me!

[merlin]

I'm envious of some of your mortgages in other states....I pay $1600 a fortnight for a 3 bdr house in Sydney.

[blueoval]

I dont envy those living on the east side at the moment when it comes to the mortgages. It blows my mind just thinking of what you guys/gals have to cop.

[GreenMachine]

My partner and I were renting close to town, $300 a week. Impulse bought a 3 bedroom house on the weekend, about 6k's from the Brisbane CBD. Repayments will be about $2500 a month.

Not sure what the market is like in other states/cities, but we were afraid that if we didn't get in now, prices would continue to rise and we'd miss our chance.

[loxxr6]

I own my apartment (by that I mean I have a mortgage) and have an investment property (2nd mortgage). If you can afford to get into a place you like, do it.

Make sure however you look at your lifestyle as well. For me two mortgages sucks as I'm used to having more free money available. If you can make the sacrifice or work it so you're not too disadvantaged, go for it.

[xe351]

were renting atm at 170p/w which is not bad, tidy place, but wont be buying for a while - at least till i get another job!

why do people say to buy now? are prices going skyward again?

[Grasshoppr]

Buy Buy Buy...

Prices are always going to be expensive and with those savings you would be stupid to still rent. Rent money is dead money. I currently have an investment property which I rent out and I purchased this 4 years ago on a wage of about $42,000. Everyone has to scale back their thoughts when purchasing. Your not going to be able to purchase where you currently rent as prices are always too high. look at moving to a suburb that is a little further away from where you are nd start to investigate prices from there. Where I currently rent the house prices are around $350,000 just too far outside of my range at present so when I go to purchase my HOME I will have to look elsewhere.

my 2c

[blueoval]

Originally Posted by xe351

were renting atm at 170p/w which is not bad, tidy place, but wont be buying for a while - at least till i get another job!

why do people say to buy now? are prices going skyward again?

Thats is the word on the street. Not totally sure how true it is, but my agent told me this recently AFTER I bought my house off them. Said to me that if your gonna do it, then do it NOW. They estimate in 12months for it to become simply unfordable for the average joe on average wages to afford anything despite what deposit you have. Once again, this is what they told me, and its not gospel.

[pauljh74]

Bought a unit recently. Financially I'm doing it pretty easy, but I have to work long hours to do it. Working *just* full time wouldn't be enough but working both jobs at 55 hours a week can see me pay it off in 10 years.

[Mark351]

Rent isn't always dead money. If you can invest what you would otherwise spend on a mortage less the rent, it can work out to be better for your wallet in the long run. Of course, investing and not spending that difference is the hard part.

Having said that, I've got five acres, which should end up a good long term investment.

[Peter B - CV8]

Have you thought about your First Home Owners benefits (ie $7k + no purchase duty on places up to $600k ????). You have to live in the property for a least 6 months - but can then rent it out as you wish.

[colossus]

Buy buy buy!

[blueoval]

Originally Posted by Peter B - CV8

Have you thought about your First Home Owners benefits (ie $7k + no purchase duty on places up to $600k ????). You have to live in the property for a least 6 months - but can then rent it out as you wish.

Yep. my plan for the next 6 months.

[Bucket]

I'm renting but not by choice....housing prices in Perth are stupid at the moment...I've only been here a year and a half...had my F/T Job the same period of time. To buy a house on total finance...you need to have atleast 1400 free for the repayments alone....that'll get you into a studio appartment...dont for get rates and/or strata...Forget buying yet....i need to be earning 50K + atleast to be comfortable...I'm moving out of the Townhouse I've been sharing for the past year...it went from 150 p/w to 175 in one foul swoop. I'm now paying 765 A month in Rent not including bills...blow that...I cant put much away for a house forking out $1000 a month in rent and bills...

[MITCHAY]

I pay $50 a week rent to live at home. Actually kind of depressing the amount of money I've wasted as it would have paid for a 1/4 of a decent house give or take.

[XTGTinterceptor]

If you can afford 50k then buy 5 @ $100k each and rent out 4 of them and work it so that yours is paid off first then start on the others one at a time I can give you the number of a mortgage broker that I trust. I had buckleys chance of owning with the banks way so I changed and now I own, that is own my 1st investment property. pm and I will give you the details. Nation wide. They may even get you to buy your home first then expand. dont waste the money most of us never see! all the best

[blueoval]

what kind of house/apartment can you possibly buy for 50k?

[Yellow_Festiva]

Originally Posted by blueoval

what kind of house/apartment can you possibly buy for 50k?

Well I think what they were getting at is buying $500K worth of real estate (10% deposit) and focus all the rent and personal income into your own place as the interest is not tax deductable.

To the original poster. I'm glad to see you are asking these sort of questions, at what i'm assuming is a young age as you mention you are first year graduates.

My advice to you:

Build yourself up GRADUALLY. I would set my limit at $300k not $500k.

If things are good at home, for both you and your partner than stay put. Buy a place you will be happy to move into eventually and either rent it out straight away or keep it empty / have some basic furniture there for 6 months and live there a few days a week.

But remember this. If the first home buyers grant is $7k, you will probably lose $7k for the 6 months it's vacant anyway.

But there are other issues to consider, depending on your long term plans for your property, such as capital gains tax, and the loop holes associated with allocating what property you maintain as your PPOR (Principal Place of Residence).

Good luck to you. Avoid renting if possible as you will not see any benefit other than paying off another persons mortgage (and having a place to stay I guess).

Seek advice, both legal and from an accountant.

If you stay at home for a year or 2, skimp, and save you will be amazed at what you can save if you put your mind to it.

Good luck.

I'm 27, and have been buying and selling real estate since I was 19. The earlier you start the better.

[Falcon Coupe]

If you can afford it buy now, blocks of land in my area are twice the price i paid for my house and land 10 years ago, it may level for a while but prices will not go down.
While you're at it, fix the loan for a few years, rates may go mad depending on the next election.