Is Rent "Dead Money"?
#1
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?
#2
Re: Is Rent "Dead Money"?
If you are happy with your decision, what anyone else thinks is meaningless
Good luck
Last edited by Amazulu; Apr 10th 2013 at 3:14 am.
#3
Re: Is Rent "Dead Money"?
that's what i want i wanna hear, the different 'expert opinions'. what's urs?
ta!
ta!
#4
Re: Is Rent "Dead Money"?
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.
#6
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!!
#9
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.
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.
#10
Banned
Joined: Jul 2012
Posts: 3,300
Re: Is Rent "Dead Money"?
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.
#11
Lost in BE Cyberspace
Joined: Oct 2005
Location: Hill overlooking the SE Melbourne suburbs
Posts: 16,622
Re: Is Rent "Dead Money"?
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.
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.
#12
Lost in BE Cyberspace
Joined: Dec 2010
Posts: 14,040
Re: Is Rent "Dead Money"?
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.
#13
BE Forum Addict
Joined: Jul 2010
Posts: 1,253
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.
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.
#14
Re: Is Rent "Dead Money"?
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.
#15
Re: Is Rent "Dead Money"?
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.
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
Last edited by Hebe; Apr 10th 2013 at 6:28 am.