Renting & Owning

[GTR_STEALTH]

Just curious to know how many rent, how many own or are paying off their place, and how many are still living at home.

Myself i rent and just the other day i got a letter from the Agent saying they're gonna put the rent up! Did a few calculations and it works out to be a 25% increase! Fark me i wish i got a 25% increase in my wages!

/minirant

Im thinking now that interest rates are coming down a bit it might be a good time to buy something maybe around Jan/Feb even though i dont really have much for a deposit. Im not eligable for the first home owners grant either....but at least the money is going to something i would own. The thing that worries me is being owned by the bank having to pay back such a high amount (which would work out to more than the monthly rent) and not bein able to enjoy myself as much whether it be, workin on the car, goin on holiday, goin out, etc....

What would you do?

And what are your personal stories? Anyone bought their own place and regretted it a few years down the track?

[ClutchBurndout-:(]

paying off a house is better than renting obveously, like the add, rent money is dead money, but the same situation goes with everyone in your situation, often paying off a house = less fun and money, thats the price you pay, i still live at home being 21, im planning on buying a house when my pay goes up next (in the next few months) but im not worries because i dont spend alot and to me spending on my house is just as good as spending on my car

[Roy]

Rent money = dead money? Only if you are spending your spare cash on hookers and booz.

There is plenty to be said for not paying $1000 per month in interest for the honour of being a slave to the banks for the first 5-8 years of the mortgage. Only to have to pay rates, maintenance costs and hope that your property appreciates. Keep in mind it doesnt really matter if your house is worth 100k more after 4 years if you have only been paying off the interest for the first years of the mortgage and come payment of stamp duty, legals, mortgage insurance etc means ...well it isnt all roses.

Not saying its all doom and gloom, but its important to know how some get caught out. I know people who are kept broke by their mortgages and there isnt any real light at the end of the tunnel. I also know those that have been smart about the house they bought (could afford) and are making a go of it.

I rent, would love to own a place, but at $2700-2900 month for a place, i could simply put the $1900-2100 per month into savings, stocks (now is a good time) or wheatever and be financially secure. Sure you pay tax on those earnings as well....but just be sure you understand your situation and what is best for you.

Old school home buyers with their 20-40% deposits sit far prettier then those relying mostly on first home owners grants.

[Mohsen]

im saving for a house.. so instead of buying a car when im older

ill put a deposit on a house and get the old man to buy me a car.

seems like a fair agreement

[paulr33]

if you have money to buy, now is a good time to buy

if you have no deposit, forget it

get as much deposit as you can, over 25k - try 30/40 even more if you can

its far cheaper to rent than buying a house & you can live where ever you like cheaper

- but you dont own the place

you wont regret selling a place, you can always sell it and move somewhere else

its not like your gonna buy one house and live in it forever

its likely youll sell it in the future and move (could be 5 years, 10, 25 who knows)

- your job will change several times

- youll have family changes etc

- so what is static now, isnt static forever - lots of things will change

it typically costs twice as much to build a house new

i brought 3 months ago, house built in 1981

[Kaz200]

Well keep in mind they cant increase the rent more than once every 6 months.

Secondly they need to give you 60 days notice and it must be in writing and it must be with the 'notice of rent increase' form and it must allow an extra 2 business days for postage time (unless hand delivered). It also must state on it that if you do not agree with the increase, you have the right to apply to CAV (consumer affairs VIC) within 30 days for an investigation.

If the notice does not comply with all of these then it is invalid and you do not have to pay the increased rent. You should then contact the TUV (tenants union VIC).

If you think its excessive and not in line with the rent prices in your area, you can apply to CAV to investigate it within 30 days of receiving the notice. They will inspect the house for free and give you a report which you can show to your landlord, and if they are still going to increase it then you can go to VCAT to get an order that you don't have to pay the increase or pay a lesser amount.

Depending on your relationship with your landlord, you can try to come to an agreement with them instead. Especially if you have complained about any issues with the property and they haven't fixed them. You could mention that its so high that you were thinking about moving out, and maybe they would reconsider it to a lesser amount, or maybe they would say 'yep, see you later! As soon as you move out, I'm upping it 40%!'...

Also if they don't send it registered post or hand deliver it, there's no way they can prove you received it. Actually a real estate agent once claimed they put a notice under my door, but that was total BS, how would it go missing? They were so disorganised, I think they had forgotten and I could tell they were lying either way. Anyway they gave me a conveniently backdated "copy" which was only 30 days notice anyway. I complained to my landlord that they were dodgy, it wasn't done legally and lying about giving it to me, and because we had a very good relationship (he never wanted me to move out basically), he dropped the rent increase for 6 months, and it was the only one I had in 3 odd years and it worked out to be like $10 a week so what did I care really.

In regards to buying a house, I think you really ought to see a financial planner to discuss your personal needs, goals and current situation. One of my workmates thinks house prices will drop by 40% next year. I think the increase to FHBG will raise the market prices anyway. Metricon has a current FHBG of $42000. But I'd be curious to see if their house/land packages had/has increased by $20k to offset that. They probably have.

With all the financial problems at the moment, you would also need to consider your job security.

Anyway hope that helps

[blind_elk]

I'm currently renting, but I take possession of a brand spanker next Friday.

A house is, in general, an appreciating asset. And there aren't many of those investments available.

Here's my maths (assumes everything constant - simpler that way):

Renting, $10k per year. Thats $250k in 25 years. I have nothing, other than $250k less in my pocket.

Buying, $250k mortgage, cost me $500k in 25 years. Ok, I've spent twice as much, BUT I have an asset worth $750k

Given the tightening of the rental market, and the easing of interest rates, I reckon that I'm going to be even better off at the end of the mortgage.

[LEANBAC]

im just process of buying a house... its my first house, but i will be renting it out for aslong as i can, an ill just stay with the family

who else is going to wash the dishes? hahahahhaa

[krzysiu]

im just process of buying a house... its my first house, but i will be renting it out for aslong as i can, an ill just stay with the family

who else is going to wash the dishes? hahahahhaa

Smart man, im planning on doing that too Parents to secure a loan for me and buy a house to rent to some suckers and get em to pay the house off for me

[J3TR33]

i have asked the question about house prices to a few of my lecturers.. and they have said to wait for a year or 2 before buying a house, as house prices are very likely to fall.

Or you could buy a house, live in it yourself and rent out two of the rooms. So then your basically living rent free, and paying of the house with the rent money you receive and the money you would have spent on rent. Im not sure if this is possible, but its something that iv been thinking about as well.

[R31Nismoid]

I wouldnt buy just yet, if the market keeps going up and down housing could well get nasty if we fall into a hole, people loose jobs and so on.

Also you would hope your job is secure too first. Nothing worse than getting into a house, in a bad economic climate trying to get a good deal... and then getting the shaft from your job and being really in the shit.

Kaz's post is spot the money, especially if there are things wrong with the place.

I rent, have no intention of buying for a few years yet.

I nearly got into the market 6 years ago. Kicking myself now in one way that i didnt... but then i look back at what ive done, where i've been and so on (couldnt do that with a mortgate) and i cant say i regret it. Ive seen great places of the world, met great people and had a ball.

Just annoyed the prices went so high so fast due to cashed up bogans paying more than they should... i hope the market pops nicely and prices plummet and make these credited up people realise you cant do that forever

[some_cs_student]

I'm planning on the buying-and-renting system as well, but I'm currently investing some more money in shares due to the market been low.

If we are going to be badly effected by the world economies, and the price of things start going up but salaries don't, I can't see how housing prices could increase as well due to people having less money to make the purchases.

So I'll be waiting another 6months at least and trying to save some deposit up (less share investment...).

[saff_cossie]

We own (well paying off a mortgage) and have done for the past 2.5 years. We had a good opportunity and price to buy at so did it. It has its moments though and with changing jobs it gets a bit nerve wracking as well as owning a performance car or any expensive car for that matter becomes a juggle.

Ours had appreciated a lot and when we put it on the market, the agent even said last November, December was the height for our area and being an apartment near the beach it has some slight seasonal fluctuation too.

As long as the asset appreciates more than the interest in the period you are living there, it is a good thing. No point crippling yourself on a mortgage that in 2-3 years if you want to sell, you have paid more than it has appreciated.

[Primordial]

Bought a townhouse and moved in 6 weeks ago.. already paid off half of it thorugh a shitload of saving while I was living in the parents place (I'm 24, but got along well with my p's so it wasnt too bad! ). Remember if you're planning to rent the place out that you buy, you need to live in it beginning in the first 12 months, and for a period of 6 months or more to qualify for the FHOG.

There are some valid points above about instability in the market, but I think that as interest rates are dropping, more people will be looking to buy - more buyers means higher demand, which bumps up prices. On the other hand, market instability and job losses could be cutting that demand for houses back down again. It's 50/50 imo so I doubt the market is going to be too heavily affected.

We've seen a decrease in prices since the boom a number of years ago, but I reckon it's come close to bottoming out soon, if not already.

I think this time is a good time to buy! Supposedly the developers of new houses will be tempted to bump prices by up to $21,000 to 'steal' the FHOG for new establishments so it'll be interesting to watch what happens with that!

[Johnny]

land prices arent too bad now; just bought land in 'college view' a few weeks ago and at the auction we were only competing against another young couple; got to 332k and we were highest but the owner passed in.

reserve was 355k land is over 700sqm

sold my house a month ago on plenty road in bundoora for 380k; not bad for a single storey 30+ year old place but rental was good at 350p/w

my parents house will be for sale in 6 months time but expect to fetch 800-900k; this again in bundoora

[DogKnight]

I just purchased a house about 6 weeks ago. It was a long settlement, so the purchase was actually agreed to back in July before the whole world financial crisis was fully known. Either way I am happy to no longer be renting. Of course I dont have the disposable income I used to, but in the end I know im not paying for someone else's retirement.

[Johnny]

Renting has its advantages; lower costs and everything in the house has a warranty.

disadvantages is evicting can occur and you have to move all your stuff so you can never really that 'Im home' feeling

[Wyseman]

To any of the people thinking about buying their first home and renting it out.

Make sure you don't claim first home buyers grant for a place you're not living in. The government is now doing a great data matching exercise to make sure utility bills, tax records, drivers licences, medicare etc at the address match the person applying for the grant. If you don't match, you can be called in to explain why you've claimed the grant for a property you don't live in. Some people are fine, e.g. the bills are just in partners name etc, however a lot of people have been forced to pay back the grant. They're also doing cross-state data matching to make sure people haven't claimed a stamp duty exemption / discount in another state.

Could be an expensive mistake, so just be careful.

[Primordial]

To any of the people thinking about buying their first home and renting it out.

Make sure you don't claim first home buyers grant for a place you're not living in. The government is now doing a great data matching exercise to make sure utility bills, tax records, drivers licences, medicare etc at the address match the person applying for the grant. If you don't match, you can be called in to explain why you've claimed the grant for a property you don't live in. Some people are fine, e.g. the bills are just in partners name etc, however a lot of people have been forced to pay back the grant. They're also doing cross-state data matching to make sure people haven't claimed a stamp duty exemption / discount in another state.

Could be an expensive mistake, so just be careful.

Why not just live in it for 6 months.. then move out and rent it out... Have your cake and eat it too

[ClutchBurndout-:(]

is it legal to live in your skyline?