fastrhino

I have seen a thread on this subject but now i cant find it, even with the search facility.

i am wondering weather long term renting is a better option for childless couples, cost savings over buying.

mick

esperanza

We're seriously considering not buying as well - or if we do buy then it would be an investment property rather than a dream home.
Of course the plan could change! But for the immediate/medium-term future renting gives us lots of flexibility with no risk, which seems like the best option.

The Murphsters

Hi Mick,

I am sure someone else will disagree but in purely financial terms and over a long time i cannot see how renting can ever be better than buying. With buying, after 25-30 years you will own a property worth alot more than what you originally paid for it. If you had been renting all that time you have nothing. As there is not a great deal of difference between rent and a mortgage then i cannot really see how you would save a great deal month to month.

A property as an investment is by far the safest way of securing a pension, when you retire you could even sell up and rent a smaller place and live quite happily on your pension and travel the world on your house proceeds.

esperanza

Not necessarily true.... over the short term renting is cheaper as you do not pay the costs of buying & selling and you can also give notice for when you want to leave rather than wait months for a buyer.
There is also no guarantee that the property will be worth a lot more - it is likely that the value will increase, but I certainly wouldn't rely on it for a pension.
There will also be maintenance costs when owning a house which would be the landlord's problem if you were renting.

I wouldn't advocate renting forever to anyone - I think there is considerable emotional security in owning your own home, aside from the probably financial advantages. But in the short term, when first arrived in a new country, I think there is a lot to be said for renting.

chris96

What are you talking of when you refer to short term, 1-3 years can make a massive difference in terms of house prices and interest increases.
Of course it can all go the other way and slump to, also if you keep you cash in the uk while you rent and the exchange rate goes up etc, etc.
it's just one big gamble.
Chris96

esperanza

Exactly - and if you get stuck in a slump then the only thing for most people to do is sit it out. If you aren't sure about staying in one place, then it is by far the safest option to rent - the cash you would use to buy can be invested elsewhere, so it will still be working for you.
I would say when you are sure that you want to be in one place for a while - or invest your money in one place for a while - then buy, but until then keep your options open by renting.

thebears

Best solution

Rent the house you live in (at lower cost). Rent out the place you buy and get someone else to pay it off.

And no the benefit of putting up pictures and crap in your own home doesn't cut the mustard.

The Murphsters

I was basing my thoughts on the OP asking about long term, long term i presume to mean lifetime.

esperanza

That is precisely what we are going to look in to! Great minds and all that..!

fastrhino

I think most people take the view that renting long term is dead money, but so can home ownership if you go negative equity or need to continualy spend money on the upkeep.

it is doubtfull we will have kids, so no one to leave our assets to when we die.

with property price the way they are going in perth we may have to face the prospect of being priced out of the affordable house market for the forseable future.

mick

denver

A lot of people who argue for the rent/don't buy idea forget about the high cost of moving from one place to another. Unless you are someone who does not accumulate possessions, it must be incredibly frustrating having to pack/find another house in the same area every couple of years. You are at the mercy of the landlord if he/she decides to sell the house - have to have people viewing the house etc. For stabilty I would definitely purchase my own place if I knew I wanted to stay in Australia long term.

northernbird

for some it does cut the mustard. my kids have been so much more settled since we bought our own place, kids need stability and as a few people on this site of late can testify getting the call to give you notice to move is not a good thing, just ask Renth.

themerlin

I think that was a good idea a while back, but now the rent you get won't cover the loan repayments + up keep fees.

thebears

Thats an individual property perspective.

Big Galah

Unfortunately, if you rent a 3/4 bedroom house in Sydney and would like to buy same, the mortgage may be a lot more expensive - month to month.

Say you pay 2,000 per month rent - does anyone know how much the mortgage repayments would be per month if you borrowed, say (gulp), $400,000 ?

A lot more, I fear.

Big.