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  1. #1
    Join Date
    Jan 2005
    Posts
    1,443

  2. #2
    Join Date
    Nov 2008
    Location
    Karratha WA
    Posts
    1,444

    Default

    We all know we would be richer on a day to day basis renting.

    If I just rented, would I save/invest the difference so that I could afford to rent in my old age, or would my standard of living rise to absorb the excess? I would wish the former, but have to admit the latter.

    My parents and their parents owned their own place, I have no example to follow of how to live in a rented house. How is it done?

    I know that each year my mortgage goes down. Each year my tenants rent goes up.

    I have noticed that some things are difficult to prove by logic or 'doing the figures'. Home ownership is sometimes one of those. I bet the people who write these articles own their own home & aren't selling based on their findings.

  3. #3
    Join Date
    Oct 2008
    Location
    Auckland/Melbourne/ whereever the money is
    Posts
    1,380

    Default

    totally agree.
    There is definitely a financial cost to home ownership, but most are happy to pay that because they see it as their savings vehicle for later life.
    This is why the Govt will need to be very careful with tax changes because if it kills the return relied on by retirees, suddenly there will be a huge demand for Govt financial assistance from the middle-aged / elderly who do not have a long savings history in things like kiwisaver, or have lost the lot in "Managed Shares".

    The logic of housing involves much more than just the cost of it,or the demand for it, it includes the feeling of control, the security, the forced savings & many emotional aspects and social aspects that "Economists" seem to regularly ignore. (as evidenced by Bernard H -the economic journalist admitting that he had underestimated how stubborn homeowers were about holding out for prices they wanted, which had meant the prices didn't drop the fabled 30% - of course when challenged to sell up his own place so he could buy it back again for less in 2 years time, he would not have a bar of "the Risk")

  4. #4
    Join Date
    Feb 2010
    Location
    Bangkok, Thailand
    Posts
    24

    Default

    Renting makes sense when a person can't afford to buy his own house. Others see renting a way to save money rather than owning, but if you look at it, owning is the cheapest way to get your own property permanently.

    _________________
    bangkok leased office | bangkok office for rent
    Last edited by bangkok_offices; 19-02-2010 at 08:43 PM.

  5. #5
    Join Date
    Nov 2008
    Location
    Karratha WA
    Posts
    1,444

    Default

    The other thing to think about is retirement.

    I know several people who have retired and through my observations, though most are quite broke, those trying to pay rent are really struggling. Not to say that paying rates etc is easy for the rest, but the pension for 1 person is $339 per week and rent for a smallish half decent place here is $240. $100 for power, vehicle, food, doctor etc is just not possible.

    Make sure you look after your partner well and keep them alive as long as possible . A bit of a double whammy after a funeral to have your income drop by $213 per week ($522 is the couple rate) as happened to one friend of mine recently.

    Look at these examples - all mortgage free as I guess they couldn't find any happy renters!
    http://www.sorted.org.nz/retirement?...FYIkpAodfQzriw

  6. #6
    Join Date
    Sep 2007
    Location
    Christchurch
    Posts
    1,259

    Default

    Can you get an accommodation allowance if you're on Super and renting?

    Not that I think it makes that much difference if you do. I'd hate to have to live on just Super even with a mortgage-free house!

  7. #7
    Join Date
    Sep 2008
    Posts
    7,561

    Default

    to me renting made more sense

    while i was moving

    once i had stopped moving

    buying made more sense

    esp. as by then i had saved enough to skip a morgage

    in a stable economy it's probably better for the country to have a very high proportion of workers who own their own homes

    but when the economy is custard

    it's probably better to have a highly mobile workforce who aren't tied down by real estate

    chch, tokoroa etc. become HUGE weights on the social welfare net when people find it easier to go on welfare and demand the gov. bring jobs to them, rather than just give notice and move to where the work is

    we need a mix of renters and home owners

    and the balance is always being "tuned"

    by events and the economy

    manurewa to the manawhatu and start making milk
    Last edited by eri; 21-06-2011 at 11:04 AM.
    have you defeated them?
    your demons

  8. #8

    Default

    Yes it does make sense, you have a place to leave but the thing is you have to pay every month.

  9. #9

    Default

    If house prices flat-line for the next 5 years or so (which is quite likely), is it really still worth buying?
    The only advantage I can see is inflation eating away the mortgage debt.
    BUT, inflation is not inflating peoples earnings at present - just their expenses.
    Do you know anyone with a 4+% pay increase in the last few years?
    So how can the debt be inflated away if inflation is only happening on the expense side?
    Seems to me that there is very little financial benefit in owning at present.

    In my situation, I rent an $750k house for the cost of a $250k mortgage (in rent).
    Either I triple my outgoings to have a place to call "home" (actually a place the bank owns) and buy, or
    I save the difference. It's a no-brainer!

  10. #10
    Join Date
    Nov 2008
    Location
    Karratha WA
    Posts
    1,444

    Default

    Quote Originally Posted by notch View Post
    Either I triple my outgoings to have a place to call "home" (actually a place the bank owns) and buy, or I save the difference. It's a no-brainer!
    Most people wouldn't save, despite best intentions.


 

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