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Is Rent "Dead Money"?

Is Rent "Dead Money"?

Old Apr 11th 2013, 6:03 am
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Default Re: Is Rent "Dead Money"?

Originally Posted by commonwealth View Post
is that 3.5 x annual gross income?
Yes
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Old Apr 11th 2013, 2:22 pm
  #62  
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Default Re: Is Rent "Dead Money"?

Originally Posted by Jon77 View Post
Income insurance is one of the biggest mortgage add on cons out there, read the small print before taking one of these plans out.

We got suckered in to a mortgage 'protection plan' with our mortgage provider in the UK and regretted it.
We had the opposite experience in the uk. We had taken this out for my husband as he was more likely to be out of work than me, and sure enough he was unemployed for six months and if it hadn't been for the mortgage protection we would definaty have had our house repossesed
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Old Apr 11th 2013, 3:02 pm
  #63  
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Default Re: Is Rent "Dead Money"?

Originally Posted by Margaret3 View Post
Eeeeek, I didn't realize things would be that tight. The reasons you've given are some ( amongst others , like two , expensive girls to support, and the fact we prefer the more expensive suburb lol) are the reasons we are in a rental. However, it's not a thing to look forward to in old age.....moving from rental to rental! And who's gonna rent to an OAP
Thank you everyone who warned me off for the right reasons- rather than jumping out at me without knowing anything about my circumstances I merely saw a post on here which triggered a little hope that I might actually be able to find somewhere to live when I get there (newbies arriving are grateful for any constructive advice when they don't know how these systems work). I wasn't aware of Housing associations operating similarly to the UK for instance- well I still don't know how it works, but at least it's something else to look at. It must be very easy to be complacent & a bit judgemental when you know what you're doing.

Similarly to you for instance, Margaret, the thought of having to change rentals frequently, & in my case with a child in tow is worrying.

Beoz-I own my home, but not outright- I work, but am of an age where it's not going to be easy to secure employment, & certainly not straight away. And the australian Gov't charge for my visa is going to be over 50k....I'm not complaining & I'm doing my best here but I've got responsibilities & only a certain amount of funds. You want to see us out on the streets as soon as we get there? I have a child who is an Aussie Citizen & entitled to be there.....he'll need somewhere to live & it's keeping me awake at night already ! What happened to your empathy?

Point taken though on the "Council" question Commonwealth- that's exactly the warning info I need ! Cheers everyone
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Old Apr 11th 2013, 3:39 pm
  #64  
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Default Re: Is Rent "Dead Money"?

In the attached example, the average over 20 years interest repayment element alone works out at $373 per week then on top of that there's rates, repairs and improvements and that's before you even start chipping away at the capital repayment. Also there's stamp duty, legal fees, etc to buy. And extortionate estate agent and other fees when it comes to moving/selling. So for us who are renting a house that is in the value range of the attached example but paying $440 dollars a week to rent, it's a bit of a no brainer really. Also, paying $3700 per month repayments would be very hard to do.
Attached Thumbnails Is Rent "Dead Money"?-repayment.jpg  

Last edited by paulry; Apr 11th 2013 at 3:42 pm.
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Old Apr 12th 2013, 12:37 am
  #65  
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Default Re: Is Rent "Dead Money"?

oh thats interesting.
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Old Apr 12th 2013, 1:47 am
  #66  
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Default Re: Is Rent "Dead Money"?

Originally Posted by campervanfan View Post
Beoz-I own my home, but not outright- I work, but am of an age where it's not going to be easy to secure employment, & certainly not straight away. And the australian Gov't charge for my visa is going to be over 50k....I'm not complaining & I'm doing my best here but I've got responsibilities & only a certain amount of funds. You want to see us out on the streets as soon as we get there? I have a child who is an Aussie Citizen & entitled to be there.....he'll need somewhere to live & it's keeping me awake at night already ! What happened to your empathy?
Empathy .... well ... my inlaws who are nearing retirement would certainly love to come and live near Mrs Beoz for a while but simply cannot afford it. They can't even afford a visit. Never in their wildest dreams would they consider using taxpayers money to fulfill their "want".
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Old Apr 12th 2013, 2:11 am
  #67  
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Default Re: Is Rent "Dead Money"?

Originally Posted by paulry View Post
In the attached example, the average over 20 years interest repayment element alone works out at $373 per week then on top of that there's rates, repairs and improvements and that's before you even start chipping away at the capital repayment. Also there's stamp duty, legal fees, etc to buy. And extortionate estate agent and other fees when it comes to moving/selling. So for us who are renting a house that is in the value range of the attached example but paying $440 dollars a week to rent, it's a bit of a no brainer really. Also, paying $3700 per month repayments would be very hard to do.
Take a look at the link I posted on the front page. You can put in your particular circumstances and it will give you a personalised graph of when the break even point is for rent vs buy. Advanced options allows you to enter factors for the above extra fees.
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Old Apr 12th 2013, 3:14 am
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Default Re: Is Rent "Dead Money"?

Originally Posted by GarryP View Post
Take a look at the link I posted on the front page. You can put in your particular circumstances and it will give you a personalised graph of when the break even point is for rent vs buy. Advanced options allows you to enter factors for the above extra fees.
What a great little calculator! It seems that for the entire 30 years I'll be much better off financially renting rather than buying. Of course once the mortgage is paid off the winner becomes the loser and vice versa.
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Old Apr 12th 2013, 3:43 am
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Default Re: Is Rent "Dead Money"?

Originally Posted by paulry View Post
What a great little calculator! It seems that for the entire 30 years I'll be much better off financially renting rather than buying. Of course once the mortgage is paid off the winner becomes the loser and vice versa.
Yes it told me buying was never better than renting over the next 30 years.
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Old Apr 12th 2013, 4:12 am
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Default Re: Is Rent "Dead Money"?

Originally Posted by paulry View Post
What a great little calculator! It seems that for the entire 30 years I'll be much better off financially renting rather than buying. Of course once the mortgage is paid off the winner becomes the loser and vice versa.
You do have to make sure the advanced bits match your costs - and it only really works if you invest the difference between what you would have paid and the rent - if you blow it you are no better off
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Old Apr 12th 2013, 4:24 am
  #71  
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Default Re: Is Rent "Dead Money"?

Originally Posted by GarryP View Post
You do have to make sure the advanced bits match your costs - and it only really works if you invest the difference between what you would have paid and the rent - if you blow it you are no better off
thats what i thought as well. one must have a disciplined approach to managing the difference between rent and mortgage repayments.
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Old Apr 12th 2013, 5:21 am
  #72  
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Default Re: Is Rent "Dead Money"?

Post 10 said it. No rent protection laws to speak of in Australia. The three monthly,I believe inspection I would find rather intrusive.
Saying that there is the freedom to move for whatever reason and not dead money.

Can government maintain the over inflated Australian property market? Highly debatable. If you intend to stay long term as have found something/where you love being then not so important perhaps when property does correct.

It is far from simple these days.A crunching of figures will show you financially where you stand best,but as we know rates are variable.

I decided against buying further property in Australia but sadly flipping over priced houses to one another may be a major economic activity once the resource downturn takes off and interest rates drop further.
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Old Apr 12th 2013, 9:13 am
  #73  
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Default Re: Is Rent "Dead Money"?

do you think i interest rates will stay low for quite some time?
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Old Apr 12th 2013, 9:46 am
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Default Re: Is Rent "Dead Money"?

Depends on Chinese demand and Euro zone procrastination.

Originally Posted by commonwealth View Post
do you think i interest rates will stay low for quite some time?
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Old Apr 12th 2013, 10:24 am
  #75  
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Default Re: Is Rent "Dead Money"?

Originally Posted by IvanM View Post
Depends on Chinese demand and Euro zone procrastination.
that sounds like a yes.
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