SpeedyJon

That's a pretty good statistic, sounds like the right move for you in your situation. Do you have a 100% mortgage?

freebo

And if you don't have a 100% mortgage have you taken into account interest you would earn on the balance?

jmh

No - 16%! LOL - yes really. I don't believe in overextending myself!!

jmh

Yes I have which is why I have invested the difference.. Always good to have a varied portfolio of investments. Property, salary, interest etc.


On that subject, I saw a tv programme a few years back that crunched the numbers on property as an investment. They found that if you bought your property as your living accommodation and didn't need to cover rent you were usually better off in the long run. However if you bought your property solely as an investment you would have got a better return from other sources in the longer term. I can't remember whether the stock market or interest based investments came out on top.

Having said this. Those with some talent at making money from buying and selling property are usually good at reading the market and know when and where to buy and sell, unlike the rest of us who let emotion cloud our judgements too often.

IndieG

A 3 bed house in my suburb is renting for $400 p/w. Mortgage (interest only), maintenance, rates etc is costing the investor around $1500 p/w, and that is based on a very conservative estimate. Renting in my case makes eminent sense

freebo

Renting currently makes a lot of sense in Australia, who knows - it may soon make sense to buy in England, then - even later it may make sense to buy in Aus.

michelleh

We did rent from the minute we landed..... For our situation what good would renting for a couple of more years have done? House prices in Oz increasing .... realistacally our house in UK will probably not increase in value for 4/5yrs plus.... then it may be back up to 189,000 GBP mark, how much do you envisage prices in OZ to have increased by then...as I said the maths unfortunately did not work out.... we did seek professional advice and sometimes you have to face the truth.... even if you dont like it..

Life is full of if's, but's and maybe's .... all I can say is we had to deal with what was on the table and our table was not very full and not likely to get full enough even with the best will in the world.

MartinLuther

I know people like to trot out opportunity costs but personally I have found that it's better to pay off a mortgage than to have that money earn interest on savings (beyond that needed as a slush fund). The interest rate is higher and it's effectively tax free.

MartinLuther

Due to negative gearing keeping Aus rents down, from a financial point of view, the rent/own decision in Aus is completely different to the UK .

IndieG

''Only 3 per cent of all loss-making properties are owned by taxpayers with a taxable income of over $200,000. Taxpayers who earn $80,000 or less own 80 per cent of all loss-making properties.''

Is it only negative gearing that is keeping rents down?

http://www.smh.com.au/business/housi...817-127lv.html

MartinLuther

What else is?

Landlords aren't doing it for philanthropic reasons. Without negative gearing rents would rise to cover expenses and you'd end up with the same situation as the UK where rents are comparable with mortgage repayments.

wrt the quote you pulled out. What percentage of taxpayers earn more than 200k and what percentage earn 80k or less?

Don_Angel

I can see exactly where you are coming from, there is no point bankrupting yourself for a life in Oz. I think everyone knows that Aus house prices high but it's true that UK prices are going to under pressure for a while when spending cuts filter through to the economy. Another round of BofE QE may have got the houses shifting a bit faster but would hammer the pound, it's a no win situation for some.

freebo

Without negative gearing prices would fall and you'd end up with the same situation as the UK where rents are comparable with mortgage repayments.

floss in dubai

They (Well, Paul Keating) abolished negative gearing and it didn't work.

http://www.sunshinecoastdaily.com.au...ative-gearing/

MartinLuther

Other side of the same coin. Either rent goes up or costs come down (or dare I say it, a bit of both).

The reason for the difference is the same.