The Cost Of Shelter

The Cost Of Shelter

It’s a common question – should I rent or should I buy?

It’s a complex question and one that requires much consideration. It seems to me there are pro and cons for each.

See our home is what we consider necessary debt – meaning eventually most of us will have to buy a home rather than rent for our lives. It forms part of our equity bank but unless we sell and move into a caravan it won’t put money into our pocket.

The advantages of renting:

  • Being able to afford where you want to live
  • No maintenance
  • No rates and insurances
  • Being able to move around – mortgages and homes tend to be less flexible
  • Buy to invest and rent where you want to live

See I was an investor way before I was a home owner – because the nature of an investment loan is around 30% cheaper than non-deductible rent. When you are footloose and free sometimes you prefer to have less worries – besides overseas travels, jobs or relationships beginning or ending can change everything in the blink of an eye.

Andrew Mirams a finance strategist from Intuitive Finance, has seen a remarkable rise in investors who rent themselves, “there is a lot of news of housing unaffordability but investment houses are more affordable and the cost of money is low, so we lots of siblings, or work mates or families assisting their children get into investing whilst paying rent themselves”.  However a word of caution – these record low interest rates won’t be around forever so it’s best to price in affordability with an a more traditional 7%.

With so many investment options out there – we are starting to see many people beginning their investment before they walk down the aisle.

Property News