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-   -   Is Rent "Dead Money"? (https://britishexpats.com/forum/barbie-92/rent-dead-money-793514/)

commonwealth Apr 10th 2013 4:02 am

Is Rent "Dead Money"?
 
i'm about to make a property purchase. it's nerve wrecking as i'm doing it on my own. but i thought rent is dead money so i'd rather buy now than regret later. but i may be wrong?

Amazulu Apr 10th 2013 4:07 am

Re: Is Rent "Dead Money"?
 

Originally Posted by commonwealth (Post 10650480)
i'm about to make a property purchase. it's nerve wrecking as i'm doing it on my own. but i thought rent is dead money so i'd rather buy now than regret later. but i may be wrong?

Opinions are like assholes on this topic I'm afraid. Expect to get many different ones

If you are happy with your decision, what anyone else thinks is meaningless

Good luck

commonwealth Apr 10th 2013 4:21 am

Re: Is Rent "Dead Money"?
 
that's what i want i wanna hear, the different 'expert opinions'. what's urs?

ta!

Amazulu Apr 10th 2013 4:24 am

Re: Is Rent "Dead Money"?
 

Originally Posted by commonwealth (Post 10650495)
that's what i want i wanna hear, the different 'expert opinions'. what's urs?

ta!

I'm no expert on property, that's for sure! Unlike some on here.........

I prefer to own my own home. I love being there, it's our space and I can do what I like with the place.

Broad Shoulders Apr 10th 2013 4:24 am

Re: Is Rent "Dead Money"?
 

Originally Posted by Amazulu (Post 10650485)
Opinions are like assholes on this topic I'm afraid. Expect to get many different ones

If you are happy with your decision, what anyone else thinks is meaningless

Good luck

you must have a lot of arseholes then

carolinephillips Apr 10th 2013 4:25 am

Re: Is Rent "Dead Money"?
 
We rented for about 8 months, but hated it- not being able to paint walls, bang a nail in or get any repairs done without a huge wrangle and wait just drove us potty- now we own- still have repairs that have to wait until we have enough cash to fix them, but at least it is ours!!

GarryP Apr 10th 2013 4:26 am

Re: Is Rent "Dead Money"?
 
http://www.nytimes.com/interactive/b...alculator.html

Amazulu Apr 10th 2013 4:26 am

Re: Is Rent "Dead Money"?
 

Originally Posted by Broad Shoulders (Post 10650499)
you must have a lot of arseholes then

I prefer the US version, asshole. Much more descriptive - especially in relation to many on BE

Only 1. See post #4

Hebe Apr 10th 2013 4:30 am

Re: Is Rent "Dead Money"?
 
as said before - opinions differ - however, I think if you are able to pay off your mortgage quicker than the nominated time and can get mortgage free as quickly as possible then yes it pays to buy - also over a long period one would hope that the home increases in value.

We now live mortgage free and are sitting on a sizable asset - if we had rented all along then the chances are we wouldn't be in in this position. We now plough all our extra money into savings and super in readiness for retirement - I have been looking over the years at a holiday home either here or in France but to be honest can;t be bothered with the worry of it all and the fact that you end up in the same place year after year.

Zen10 Apr 10th 2013 5:18 am

Re: Is Rent "Dead Money"?
 

Originally Posted by commonwealth (Post 10650480)
i'm about to make a property purchase. it's nerve wrecking as i'm doing it on my own. but i thought rent is dead money so i'd rather buy now than regret later. but i may be wrong?

We have owned in the past, in England, but we rent right now. Our goal is to buy this year if we can. We plan to live in it for a few years then let it out when we return to the UK.

The dead money argument goes round and round. Rent is dead money, but so is the interest you pay to a bank. If it is cheaper to rent while saving for the cost of a house, then you must measure the rent against the money saved by not paying interest. Calculations differ on personal circumstances. At least with the interest route you will wind up "owning" a house, although you will have paid, for example, $500,000 for a house worth $250,000, so you still paid a kind of rent via the interest.

The main reason for owning is not being treated like a piece of crap by the landlord, quite apart from issues of dead money. Tenants have essentially zero laws to protect them, and the Australian inspection scheme is insulting and inconvenient.

For this reason, we will buy.

BadgeIsBack Apr 10th 2013 5:27 am

Re: Is Rent "Dead Money"?
 

Originally Posted by Zen10 (Post 10650541)
We have owned in the past, in England, but we rent right now. Our goal is to buy this year if we can. We plan to live in it for a few years then let it out when we return to the UK.

The dead money argument goes round and round. Rent is dead money, but so is the interest you pay to a bank. If it is cheaper to rent while saving for the cost of a house, then you must measure the rent against the money saved by not paying interest. Calculations differ on personal circumstances. At least with the interest route you will wind up "owning" a house, although you will have paid, for example, $500,000 for a house worth $250,000, so you still paid a kind of rent via the interest.

The main reason for owning is not being treated like a piece of crap by the landlord, quite apart from issues of dead money. Tenants have essentially zero laws to protect them, and the Australian inspection scheme is insulting and inconvenient.

For this reason, we will buy.

Agreed - and I do actually wonder for some over the next few years, and indeed, some who bought a few years back whether rent was the right thing to do.

Beoz Apr 10th 2013 5:50 am

Re: Is Rent "Dead Money"?
 

Originally Posted by commonwealth (Post 10650480)
i'm about to make a property purchase. it's nerve wrecking as i'm doing it on my own. but i thought rent is dead money so i'd rather buy now than regret later. but i may be wrong?

Entirely your call. I rent right now. I was tempted to buy recently in Sydney but I'd be paying through the nose for mortgage insurances, stamp duty and interest on top of the loan for an equivalent dwelling so a became satisfied with renting again.

Jon77 Apr 10th 2013 7:03 am

Re: Is Rent "Dead Money"?
 
Renters are considered an underclass in Australia, in Sydney anyway. Used to be massive estates of housing commission, now it is so many low income earners caught in a rental trap. High rents eating up pay and savings, the thought of managing to save any kind of deposit is unthinkable for many.

Not that you would hear any of this from the media such as the Sydney Morning Herald, that paper is obssessed with the eastern or the uber trendy inner west high end real estate of the wealthy, anything beyond Srathfield doesn't exist. When this is focused on their reaction is that there is usually a hut out somehwere beyond Campbelltown they could buy, around 3hrs from where they work.

Rent probably is dead money and many of those paying it are ****ed for life.

mikelincs Apr 10th 2013 7:23 am

Re: Is Rent "Dead Money"?
 

Originally Posted by commonwealth (Post 10650480)
i'm about to make a property purchase. it's nerve wrecking as i'm doing it on my own. but i thought rent is dead money so i'd rather buy now than regret later. but i may be wrong?

We don't have the funds to buy, and are far too old to get any sort of martgage, so we have to rent. Not totally dead money as you do get repairs done free, free buildings insurance, and I suppose for the little things it really depends on your landlord, where we are we also get no water or sewerage bills, all in the rent. However if we did win the lottery we would buy.

Hebe Apr 10th 2013 7:26 am

Re: Is Rent "Dead Money"?
 

Originally Posted by mikelincs (Post 10650618)
We don't have the funds to buy, and are far too old to get any sort of martgage, so we have to rent. Not totally dead money as you do get repairs done free, free buildings insurance, and I suppose for the little things it really depends on your landlord, where we are we also get no water or sewerage bills, all in the rent. However if we did win the lottery we would buy.

Absolutely. For quite a few buying is not an option and therefore the money is not dead as it provides a home.

We buy and pay for many things that does not have capital growth or keep it's value, cars, caravans, boats, furniture and on and on - rent is just another item


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