Renting when cheaper than purchasing

[Poppy Jane]

Long time stalker, first time poster..

If the suburb I want to live in is going to cost me $300 a week to rent in, or $430 plus rates etc to own, is it a no brainer to rent, and invest the difference?

The suburb is a great place to live, but not a great investment due to being a new development .. Am I missing something here?

My friends think I'm nuts looking at renting again ..

 

[moyjos]

No, not silly at all as long as you do invest the difference plus some.

If you (assuming you can afford) chose to buy in this area, would you still have servicablity in your budget to be able to invest? If so, don't forget to add that amoun to your investing amount too. Also add the other "little things" that homeownership cost. Insurance, maintainace etc.

It definitely can and does work. Many commentators have shown this to be a very valid investment strategy. I considered this when i got divorced, but I could not do it, as I found the uncertainty of not owning the roof over my head a bit unsettling and HATED the upstart 19yo PM telling me how to clean

 

[kathryn d]

I'd suggest buy, if you can.

The difference will soon be ate up, when your 'greedy' landlords keep putting up the rent.

 

[Jaz]

We own 1 IP in Sydney's Inner West and rent basically down the road - can't afford to buy the type of property we want to live in, so we're renting a place that we love instead of living in the 2 bed flat that we could afford to buy.

The place we bought ticks the boxes in terms of an investment, the place we live in ticks the boxes for a home.

Cheers,

Jaz

 

[chilliblue]

If you are confortable with renting then do. The only caveat is that you invest the saving.

 

[Kinnon Bell]

Was capital gains included in that figure? Tax deductions?

 

[citystar]

I rented for seven years to reduce my living expenses in order to save for the deposit on each of my investment properties. A little sacrifice in the past was worth it when I look back and think about what I was able to achieve. The second you purchase a place for yourself you will wish you had a landlord to complain about all of the repair and maintenance issues.

 

[Peter_Tersteeg]

Today renting is cheaper than buying. In the future, your rent will increase whilst your mortgage repayments will stay roughly the same and even become more affordable, simply due to inflation (ignoring market pressures).

If you take the money you're saving by renting and invest this wisely, you'll be ahead overall. The tax incentives from investing can make a difference even if nothing else does. If you spend the money on lifestyle, eventually you'll be very far behind.

Overall you're likely doing the right thing, but there's something to be said about owning your own home as well.

 

[JASA]

Renting can be a good choice.

I own 5 properties all of which are rented out and live in near city, modern luxury rental apartment ...concierge, spa, pool, gym. I have the millionaire lifestyle without the price tag. While rents are low, I will continue to take advantage and when the tide turns I will move back into one of my own properties and/or buy another.