Jump to content

Buy or rent?


  • Please log in to reply
26 replies to this topic

#1 Aimless

Posted 27 January 2013 - 08:22 AM

We need to move to a bigger house with a bigger backyard for our boys (currently 4 and 2).

If we buy in a relatively good area closer to where we are now, it means selling our current house and taking out a mortgage of $550k, around $800 a week in repayments. It also means putting the boys in private schools as the government schools in the local area have a bad reputation.

Another option is to move to the inner west areas with good local schools but we will need to rent. The rent would be around $700 to $800 a week, but it means not having to pay as much to put the boys in school and closer to amenities and parks. We will also be renting out our current house and the rent will pay off or even be more than the current mortgage repayments.

DH and I are leaning towards renting but I don't like the thought that any time, we could be given a notice to move out and find another place. I've heard of horror stories where renting families were forced to move out practically every year.

Which one would you do?

ETA: we don't want to stay in the current area, even though it would be cheaper, as we're too far away from everything - work, shops, etc.

Edited by Aimless, 27 January 2013 - 08:30 AM.


#2 Kalota

Posted 27 January 2013 - 08:30 AM

Personally, I would buy.... You're going to be paying the same amount each week whether you rent or buy, the difference is that when you buy you will be paying off something that is yours and will always have that investment there.

But that's just me, different people may prefer to rent. I think it really depends on what your heart and gut is telling you you would prefer to do!

#3 LynnyP

Posted 27 January 2013 - 08:30 AM

Renting and buying both have advantages.  My concern is that I can be in my own house when I am old(er) and not be subject to the whims of a private rental system.

You don't need a big backyard with children.  If you take them to parks, playgrounds etc regularly that is fine.

#4 Apageintime

Posted 27 January 2013 - 08:38 AM

Since either way you end up with a house as you're keeping your investment, I'd rent.

Overall your costs will be lower as you won't need to pay for schools. Stamp duty is a killer, but yo can always buy later if you find renting isn't working out (hopefully will a bigger deposit)

#5 Madnesscraves

Posted 27 January 2013 - 08:48 AM

I'd buy. Renting is all good and well but it doesn't seem to benefit you that much in your case. However if it's more of a case that you'd rather live in the classier suburbs then rent.



#6 Holidayromp

Posted 27 January 2013 - 09:03 AM

I would be buying especially if the repayments are going to be the same as renting.

Are you able to look at schools in a different area and have them bus there?  You can apply for out of zone enrolments.

#7 Fluster

Posted 27 January 2013 - 09:11 AM

I'd rent.  You already have the security of your own home to return to.  

We're possibly looking at the same thing in a few years, and I'm in 'camp rent'.

#8 Just Another Cat

Posted 27 January 2013 - 09:16 AM

I would buy.


Not many people rage on about how great their rental/landlord is. Plus the rent won't always be 800 a week. But your house repayments will remain around the 800 mark.


#9 Pearlberry

Posted 27 January 2013 - 09:45 AM

QUOTE (Fluster @ 27/01/2013, 10:11 AM) <{POST_SNAPBACK}>
I'd rent.  You already have the security of your own home to return to.  

We're possibly looking at the same thing in a few years, and I'm in 'camp rent'.


What? Most people's super will not adequately cover them in retirement. The last thing anyone needs to do is make financial decisions like this.

You will be in a much better position financially if you buy again.  Since you are looking at about the same cost anyway, so if you buy you are essentially getting a house for the cost of putting your children through private school. Pretty good deal. Especially if it is a good school.

Plus as PP mentioned, rent will go up. In another 5 years you can expect to be paying more anyway. Yes mortgage rates will go up at some stage too, but that isn't likely for another year or two, when you have paid off some principle anyway.

With property prices and interest rates low. I think buying is a no brainer. Having said that, don't over extend yourself of course.

#10 B.feral3

Posted 27 January 2013 - 09:54 AM

I think you should rent and keep your own house as an investment. That's a better short and long term strategy. Especially when the rental area is better for schools, parks, shops etc like you said.

Edited by Bek+3, 27 January 2013 - 09:55 AM.


#11 Ice Queen

Posted 27 January 2013 - 10:03 AM

I think you should talk to an accountant and do the sums properly.  Include stamp duty, costs of moving, costs of the private schools, costs of public schools etc etc.

I dont think you should be taking advice about such an important decision from a bunch of randoms who may or may not have financial backgrounds.

PS renting doesnt have to be a horror story.  I have rented for 20years in various cities at various pricepoints and have no horror stories.

#12 axiomae

Posted 27 January 2013 - 10:11 AM

Talk to an accountant - it may work out cheaper to rent when you consider the tax break you get on owning a property you're not living in. Rent money sucks though, I hate to pay it.

#13 *melrose*

Posted 27 January 2013 - 10:17 AM

I would buy, there is no way I would pay $700-$800 a week for rent when I could be paying of my own house.

#14 BetteBoop

Posted 27 January 2013 - 10:20 AM

If you think laterally OP, I'm sure you'll find those 2 choices aren't the only possible ones.

But if these are the only choices you're prepared to consider, then if you're moving areas I would rent first.

Plus, if you rent your existing property out, you will get tax concessions and you won't have to pay private school fees.

Some lessors are happy to sign 2 year lease agreements, provided you allow for rent increases over that time. It works in their favour to ensure a stable tenancy arrangement.

#15 EssentialBludger

Posted 27 January 2013 - 10:26 AM

I don't know. They both sound like crap options to me. ph34r.gif I can't imagine having a $550k debt (even though we could easily service it) OR paying $800pw in rent. ohmy.gif

But if those are your only options I would sell and buy. But I wouldn't want the hassle that comes with an IP.

#16 missy78

Posted 27 January 2013 - 10:34 AM

I'd buy - why pay off someone else's mortgage when you can pay off your own? Just my 2 cents (I am biased though - we just  bought last year after spending years renting. The thought of having practically teenaged property managers telling me what to do is still fresh in my  mind)

#17 Pearlberry

Posted 27 January 2013 - 10:48 AM

QUOTE (axiomae @ 27/01/2013, 11:11 AM) <{POST_SNAPBACK}>
Talk to an accountant - it may work out cheaper to rent when you consider the tax break you get on owning a property you're not living in. Rent money sucks though, I hate to pay it.


Yep, defiantly talk to an accountant. RE: tax breaks, and I believe that the op said the house would be positively geared. Still, and Any depreciation she could claim would be relevant whether she was an OO or renter.

#18 Pearlberry

Posted 27 January 2013 - 10:54 AM

QUOTE (Beetlebop @ 27/01/2013, 11:20 AM) <{POST_SNAPBACK}>
If you think laterally OP, I'm sure you'll find those 2 choices aren't the only possible ones.

But if these are the only choices you're prepared to consider, then if you're moving areas I would rent first.

Plus, if you rent your existing property out, you will get tax concessions and you won't have to pay private school fees.


Yep, look at possible other options. I would rent after making a major move (interstate, overseas) not from moving from one part of Sydney to another.

Not sure where not having to pay private school fees comes from. Unless you mean that the income from the IP would pay for the fees.

#19 #tootired

Posted 27 January 2013 - 11:11 AM

It's a buyers market at the minute...I would buy.

Rent money goes nowhere, at least your paying off a house with repayments.

If it gets too difficult you could always sell one of the houses down the track.

#20 solongsuckers

Posted 27 January 2013 - 11:40 AM

I would buy. I hate renting.

#21 MsNorbury

Posted 27 January 2013 - 11:41 AM

I would talk to an accountant

Buying a house comes with a lot of costs that need to be considered.  There are maintenance costs and things like rates which you don't pay in a rental.  Yes rent will go up, probably more than repayments, but you need to look at how much interest you will pay over the course of the mortgage.

For us at the with moment the rent we pay, although it seems like a lot at first it is less than interest only on a similar house. So while the market is flat in our area we are better off to rent and save the extra money.

I guess when making these decisions t is worth keeping i mind that real estate doesn't always go up in value, and how would you cope if your property was worth less than you owed on the mortgage.

take time look at he numbers in detail, don't listen to things say property is about to boom if they are written by people who sell real estate.

Edited by juliettesmum, 27 January 2013 - 11:46 AM.


#22 NoOneElse

Posted 27 January 2013 - 11:44 AM

There must be more then 1 area to buy or 1 area to rent as options?

I would buy and send children to public school. So start looking in areas with a decent public school and go from there.

#23 Kalota

Posted 27 January 2013 - 03:52 PM

QUOTE (Fluster @ 27/01/2013, 10:11 AM) <{POST_SNAPBACK}>
I'd rent.  You already have the security of your own home to return to.  

We're possibly looking at the same thing in a few years, and I'm in 'camp rent'.


If you already own a property and you're looking for a second, I'd rent IF renting was going to be cheaper. But in OP's case the rent vs. mortgage would be almost identical, so I'd think you may as well buy and have that second investment there!

Like many PPs have said, super doesn't cut it for retirement anymore, I'm seeing my parents struggle financially in their retirement despite owning only one property and having super. Buying will give you even more equity and if the repayments are the same as what your rent would be anyway, it kinda makes sense...

Edited by Kalota, 27 January 2013 - 03:53 PM.


#24 Aimless

Posted 27 January 2013 - 04:58 PM

Thanks for the replies, everyone.

There's definitely a lot to think about and I've booked an appointment with my accountant this week to discuss my options. But I'll discuss in more detail why we're thinking rent is a better option for now.

The area that we live in and the area that we can afford to buy aren't close to amenities. It's far from the city where I work (about an hour's drive) and the public transport is unreliable. There is only one shopping centre nearby and not many clean playgrounds where the boys can run safely around. As I mentioned in my OP, the government schools have a bad reputation and we would have to put up extra money for the boys to attend private schools.

DH and I used to live in the inner west and we loved the fact that we could just walk down the street, grab milk on the way to the park on the corner. Walking around at night is also quite safe. The government schools in the area we're thinking of renting are all good. I know that we still have to pay money for excursion, technology, uniforms, etc. but it won't be as much as the fees in the private schools. Work will also be close and I won't have to fight traffic to and from home.

There is also the fact that we will have an investment property that will pay off our current mortgage, and maybe more. And my accountant has also informed me that we will more than likely get a lot of money back (money paid for council rates, water levy, etc). So even if something happens to DH and I and we won't end up affording paying $800 in rent, we can always move back to this house as the mortgage is quite low.

Another thing is that we can save more money renting (however funny that sounds). We've seen properties renting between $650-$800. If we can find properties less than $800, we can save money, as opposed to paying off mortgage repayments of $800 per week.

As PP mentioned, there are also extra costs for buying and selling property - so we may have to borrow more than $550k.

But thanks for all the advice. I've listed down what PPs have said so I can discuss these concerns with my accountant this week.


#25 Escapin

Posted 27 January 2013 - 05:12 PM

sounds like you're considering all the options OP. As someone who lives in the inner west, I'd definitely be all for renting around here and keeping your current property to rent out.

I think if you only have 2 kids, no pets and no bad rental history, then you should be able to find somewhere great to rent fairly easily.




1 user(s) are reading this topic

0 members, 1 guests, 0 anonymous users

 

Show us your DUPLO creations to win!

We love to see the cool creations kids build when they play with LEGO DUPLO. Enter and share a picture of your childs creation for a chance to WIN 1 of 10 LEGO DUPLO prize packs worth over $100 each.

Jammy, Hula Hoop, Rage: Reddit reveals most unusual baby names

A recent Reddit thread has revealed some of the more creative names in the world.

Woman awakens from coma, learns she gave birth

A US woman awakened this week from a four-month-long coma that doctors had feared would be permanent and learned that she had given birth to a baby boy, according to her family.

'Give us a break': mum sent shocking letter over Facebook baby pics

Posting a lot of baby photos doesn't make you a bad person. It may make your Facebook feed a little irritating, but it doesn't make you a bad person.

In defense of the dads who do so much

It's time to shift the focus off what dads aren’t doing and shine it on what they are.

The modern cloth nappies too cute to cover up

If you're only just joining the modern cloth nappy movement, or would like to spruce up your collection, we have to introduce you to Designer Bums.

How breastfeeding can affect your libido

When you’ve just had a baby, having sex isn’t usually top priority. In fact, for a lot of women it rates about as appealing as changing another dirty nappy.

Should pregnant women be allowed to use 'parent and child' car parking spots?

Is it acceptable to use these car parking spots when pregnant? How many of us would admit to doing it?

Healthy baby from sperm taken 48 hours after a man died

Fertility doctors have described their "most extraordinary case" - creating a healthy baby from sperm taken 48 hours after a man had died.

Anti-vaccination mum's seven children contract whooping cough

A Canadian woman who had declined to have her children immunised against pertussis, better known as whooping cough, has changed her position now that all seven of her children have come down with the disease.

How pregnancy probiotics can help you and your baby

New research suggests that taking specific pregnancy probiotics could be the answer to a range of common pregnancy side effects.

Childcare is a big problem, but there's more to it

Let’s keep talking about these issues and not allow them to be put into a neat little box that’s labelled ‘Fix childcare and everything is solved’.

Pink's awesome response to body-shaming trolls

When trolls felt the need to comment on 35-year-old singer-songwriter Pink's weight, her answer was an awesome ode to body love.

Fertility clinic offers egg donors $5000

A national chain of fertility clinics is offering egg donors a $5000 payment to cover their expenses, a first for Australia which is raising concerns the money could act as an inducement.

Baby boy abandoned in India amid fresh surrogacy concerns

Australian officials could do nothing to stop an Australian couple from abandoning their baby son, born through surrogacy in India, after they decided they did not want to bring him to Australia.

Herd immunity and community responsibility: how free-riders can make kids suffer

Individual choice works for haircuts and handbags, but not for preventing infectious diseases that kill kids.

Photographer captures 'unexpected beauty' of birth

If there is one thing Leilani Rogers knows about childbirth, it is that no two deliveries are ever the same.

Expectations vs the reality of making a toddler's clothes

Note to self: less sewing, more life. Not the party dress, but the party. The toddler, as usual, has it all figured out.

Mum meets 'dead' daughter 49 years after birth

In 1965, Zella Jackson-Price was told her premature baby girl had died shortly after birth.

Sign up to our 30 days of #PlayIQ challenge

Sign up to receive 30 amazing tips and ideas for play with baby during the month of April and submit a picture or tip on our social wall for a chance to win an amazing Fisher-Price prize pack.

 
Advertisement
 
Advertisement
 
 
 

What's hot on EB

Sign up to our 30 days of #PlayIQ challenge

Sign up to receive 30 amazing tips and ideas for play with baby during the month of April and submit a picture or tip on our social wall for a chance to win an amazing Fisher-Price prize pack.

Tips for flying with a baby

Travelling with kids requires a whole other set of skills - ones that I have learned through (sometimes unfortunate) trial and error.

How to stay calm in an emergency

I’m not expecting you to be as calm as you might be right now. What I mean is that if your panic levels are through the roof during a stressful situation, let’s bring them down to just under the ceiling.

Toddler gets 'drunk' after cranberry juice mix-up

A toddler was taken to hospital after a waitress served her sangria instead of cranberry juice at a US restaurant.

Show us your toddlers LEGO DUPLO creations

We love to see the cool creations kids build when they play with LEGO DUPLO. Enter and share a picture of your childs creation for a chance to WIN 1 of 10 LEGO DUPLO prize packs worth over $100 each.

We need to stop using this word when we talk about childbirth

Is it shaming to point out that women are often being let down in birth?

The certificate helping parents deal with pregnancy loss

For some people, this certificate will offer a sense of validation that their child was acknowledged as being here and now gone, and will help them with life post-loss.

The phenomenon of phantom pregnancy kicks

'Phantom pregnancy kicks’ are encountered by many mums months - or even years - after their pregnancy is over.

The health insurance advice you can't afford to ignore

There's one simple switch that could save you hundreds of dollars a year in private health insurance.

4D scans show how smoking affects babies still in the womb

The harmful effects of smoking during pregnancy on unborn babies may be seen in tiny movements in their faces using 4D ultrasound scans, research has found.

The most dangerous toddler food trends

Pete Evans' paleo cookbook for kids caused a storm, but there are plenty of other unsafe food trends for babies and toddlers.

Infection killed new mum of twins

Modern medicine could not save 19-year-old Sophie Burgess who died 48 hours after giving birth to twins in the UK.

How to babyproof your job interview

Once upon a time, I was a fan of job interviews. That all changed after I'd switched careers, had a baby and decided to spend the first year at home with her.

Grieving families give warnings after toddler deaths

Two Queensland families are grieving the loss of their toddler sons after the boys drowned in separate incidents last week.

Man faces jail after giving woman abortion pill smoothie

A Norwegian man is facing jail after putting abortion pills in his ex-girlfriend's smoothie, causing her to have a miscarriage.

'He's a blessing': family of baby born without eyes

Jordy Jackson was born without eyes. He has anophthalmia, which affects one in every 100,000 babies born.

Super fit model Sarah Stage defends her pregnancy body

Model Sarah Stage has defended her pregnancy body after critics claimed her slim figure at eight-and-a-half months pregnant wasn't "normal".

Why I post breastfeeding photos online

I love to take pictures of my children. In some of the pictures, my younger son is nursing.

The day I broke my baby

There are things I wish I didn't know. I wish I didn't know that companies make tiny braces, small enough to hold necks no bigger than a wrist.

Geeky baby gear

If your family is more into Star Wars, gaming and the periodic table than most, you might want to check out these geek-chic baby items.

Grandbabies: the babies born looking old

Not a day under 65 and a lifetime of struggle! That's the look of these newborns, who look adorably older than their real age. Social networking site Reddit recently featured user submissions of adorable grandbabies, here are our favourites.

53 creative pregnancy announcements

Announcing that you're expecting can be a time to express your creativity, sense of humour and imagination. Check out how other parents and parents-to-be have broken the news to friends and family.

IKEA hacks for the nursery and kids' rooms

Are you one of those that know the whole IKEA catalogue by heart? Love their stuff but want to personalise it? Here's some inspiration to help you realise the potential of IKEA furniture and fittings.

36 baby names inspired by food and drinks

A French court may have ruled out Nutella as a baby name, but that doesn't have to stop you from taking inspiration from the supermarket (or bottle shop). See what parents in the US have chosen for their delicious little ones.

Clever breastfeeding products

Check out this range of products designed to help make your breastfeeding journey more enjoyable, manageable and convenient.

 

SIGN UP NOW!

Win a year's worth of toys

Receive a daily email from Essential Baby for just the month of April with great play tips and ideas, then submit your baby at play photos to our Playwall, Instagram or Twitter for your chance to win.

 
Advertisement
 
 
Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.