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Is Rent "Dead Money"?

Is Rent "Dead Money"?

Old Apr 17th 2013, 2:28 am
  #121  
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Default Re: Is Rent "Dead Money"?

Originally Posted by commonwealth View Post
ok would you buy a newly built studio apartment approx 45sqm
close to train station, 15 mins to Sydney CBD
with fitouts eg washer dryer dishwasher bed aircon
strata etc approx $1K per qtr
no stamp duty plus get $15K govt grant

for $450K?
THAT is the bit that gets me....you already pay a Mortgage plus also paying $1000 pq, which in my opinion is very high for a 1 bed apartment buuilding.
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Old Apr 17th 2013, 2:45 am
  #122  
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Default Re: Is Rent "Dead Money"?

Originally Posted by bingobob777 View Post
crap

all depends on what your rent is vs mortgage costs and the rate at which house prices rise vs interest made on savings

on a 95% mortgage over 25 years you'll typically pay the mortgage again in interest, that's equally as dead as renting.

Why don't you all just save up for 12 years and buy outright?
Even with people who know how much interest they are up for prefer not to think about it too much. If prices did not increase massively over a generation then maybe more people would stay clear.

The old chestnuts of a place of your own are always a good one, especially when you have a family. I bought a flat in London and I disliked it immensely.
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Old Apr 17th 2013, 4:16 am
  #123  
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Default Re: Is Rent "Dead Money"?

Originally Posted by paddyo View Post
THAT is the bit that gets me....you already pay a Mortgage plus also paying $1000 pq, which in my opinion is very high for a 1 bed apartment buuilding.
based on my forecasts and budgets, net present value calcs and sensitivity analysis spreadsheets, im better off buying than renting. as an accountant i would be silly no to do the maths. i of course included allowances such as high interest rates etc. so there.

as anything in money matters, rewards are propprtional with risks. it's important to take calculated risks and be prepared for them.
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Old Apr 17th 2013, 4:35 am
  #124  
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Default Re: Is Rent "Dead Money"?

Oh I get all that, in your position I would do the same thing.
I rent here but have a house in UK (halfway through 25 yr mortgage), what I am struggling with is to find a decent house in a decent suburb here to buy which won't leave me in debt for my final working years (I am 51 next month) with another mortgage. I refuse to buy a property which has strata as its just increasing the outlay for me and I just could not at my age live in a flat for years.
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Old Apr 17th 2013, 5:11 am
  #125  
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Default Re: Is Rent "Dead Money"?

Originally Posted by commonwealth View Post
based on my forecasts and budgets, net present value calcs and sensitivity analysis spreadsheets, im better off buying than renting. as an accountant i would be silly no to do the maths. i of course included allowances such as high interest rates etc. so there.

as anything in money matters, rewards are propprtional with risks. it's important to take calculated risks and be prepared for them.
That's what I was thinking. Good luck with your new home
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Old Apr 17th 2013, 5:16 am
  #126  
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Default Re: Is Rent "Dead Money"?

Originally Posted by commonwealth View Post
yeah. it's not too bad as i'm single and spend a lot outdoors. its a forced saving plan so to speak. i have approx 15 months to save a additional 10% deposit plus buffer to avoid the lenders mortgage insurance.
At that price it's pretty low risk. If I were without Mrs Beoz, I wouldn't hesitate for a second to jump into something like that. I reckon I could be paying less in a mortgage than rent at that price. Unfortunately Mrs Beoz has high tastes, therefore its the Eastern Subs for her, which means low rent (cough cough) rather than a high mortgage, most of which would be "Dead Money" and considerably more "Dead Money" than the rent we currently pay.

I thought it was 20% to avoid mortgage insurance?
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Old Apr 17th 2013, 6:18 am
  #127  
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Default Re: Is Rent "Dead Money"?

yeah i have to pay 10% upfront deposit and in late 2014 when its all complete (hopefully) need to pay the rest 10% which i already have. then i get 15k from the govt as grant and now my goal is to save a comfortable buffer between now and late 2014.
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Old Apr 17th 2013, 6:37 am
  #128  
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Default Re: Is Rent "Dead Money"?

Originally Posted by commonwealth View Post
yeah i have to pay 10% upfront deposit and in late 2014 when its all complete (hopefully) need to pay the rest 10% which i already have. then i get 15k from the govt as grant and now my goal is to save a comfortable buffer between now and late 2014.
Right ... gotcha.
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Old Apr 18th 2013, 3:39 am
  #129  
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Default Re: Is Rent "Dead Money"?

Originally Posted by commonwealth View Post
yeah i have to pay 10% upfront deposit and in late 2014 when its all complete (hopefully) need to pay the rest 10% which i already have. then i get 15k from the govt as grant and now my goal is to save a comfortable buffer between now and late 2014.
BTW. You don't have to pay stamp duty either - correct?
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Old Apr 18th 2013, 3:46 am
  #130  
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Default Re: Is Rent "Dead Money"?

yea its exempt. gotta use all govt help u cam get! after all the taxes uve paid!

i think i save approx $30k
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Old Apr 18th 2013, 3:54 am
  #131  
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Default Re: Is Rent "Dead Money"?

Originally Posted by commonwealth View Post
yea its exempt. gotta use all govt help u cam get! after all the taxes uve paid!

i think i save approx $30k
Actually, the government is attempting to help builders and developers and the other associated "hangers on". There is barely anything available under $650,000, brand new and close to the city so it's kind of mute for most buyers.. Why on earth is Australia's most expensive state got the third lowest grant?

Australian Capital Territory: $750,000
Queensland: $750,000
New South Wales: $650,000
Northern Territory: $600,000
South Australia: $575,000
Tasmania: No limit
Victoria: $750,000
Western Australia: $750,000 or $1,000,000 for property north of the 26th parallel
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Old Apr 18th 2013, 3:59 am
  #132  
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Default Re: Is Rent "Dead Money"?

hmm i'm not sure i can relate to most people as i'm single and unavailable
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Old Apr 24th 2013, 9:15 am
  #133  
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Default Re: Is Rent "Dead Money"?

Originally Posted by commonwealth View Post
OMG I just signed the contract. Deposit taken. I have 5 business days to change my mind.
omg no turning back
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