Buying v Renting Sums

Thanks for posting.

I have heard of the Khan Academy before but never seen any of the videos.

Good analysis but would be much different to Australia as interest is not deductible on a main residence.
 
Good analysis but would be much different to Australia as interest is not deductible on a main residence.

Do you mean that the figures for buying would be much higher as you cannot claim the tax deduction on interest of your PPOR making the argument for renting even stronger?

It's a shame the old buy v rent debate is not as simple as just the money side of things. It would be a no brainer then!
 
Exactly. Its not a numbers thing, its a psychological thing. Even if you personally can resist the psychology, the capital value and rental yeild are affect by 'the herd' psychology.

Rent for as long as you can (what is that saying about cars? drive the cheapest car your ego can afford) while you are also saving and investing at least the amount you would be paying for a P&I mortgage.

When you skip a month or two of your investment/savings plan, remember that if it was a mortgage instead of a savings plan, you wouldnt have had that option. For a whole swag of people, buying a home is a form of enforced savings.
 
I remember seeing quite a robust rent vs. buy calculator a couple years ago, which tracked how better/worse off you would be in different time periods between renting or buying.

Always factor in increasing rents into equations, otherwise that saving in year 1 might mean a massive loss in year 10 when rents have jacked up substantially.
 
Back
Top