To help answer the renting VS buying question, I will never forget the feeling of handing over 7 x $50 notes each week to our real estate agent/landlord back in 1987 when I rented in Gosford. For my partner and I, this was enough to motivate us to get a deposit together to purchase our first home. If you feel the same way then read on!

These days you don’t get the same feeling of ‘giving your money away’ as we did back then as we didn’t have ‘the internet’, now digital banking creates a false impression so that the amount you are paying does not feel like it is that much. Take my word for it, pay your rent with cash and see how much it hurts.

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Renting VS buying largely comes down to convenience and cost. In order to live close to the city or even the suburbs, you have a much greater demand due to the close proximity of everything; therefore the property prices are going to be much higher. The only option that may be left open to you is to move further out. You might think that this is not an option, so I guess you first need to weigh up the costs associated such as fuel/public transport and time. That block 20 kilometers out of town is likely to be half the price of the one in town; that $100K – $200K is a lot of fuel and time, especially considering that your first place is a stepping stone to your ultimate ‘dream home’.

Other then the monthly mortgage, which is often a similar amount to what you are currently paying in rent, there are also many costs associated with acquiring your first place including; Stamp duty, inspection reports, rates and maintenance. If you are considering making the switch, it is essential that you have a plan to ensure you have considered all of the costs involved.

If you stop and truly consider the pros and cons of moving further out, you might be surprised at the benefits of ownership living out of the city and leaving behind the renting VS buying dilemma. I once had a 2 hour commute each way to work! Not much fun at the time but we did see some nice growth in the property we purchased at the time.

These points, of course are the down side of getting your own place, on the other hand the upside is quite appealing. Consider the following points:-

• A place to call your ‘own’, your own block of dirt & the pride that goes with it
• An investment that will hopefully grow in value over time
• A more permanent residence with out leases and continual moving
• No increases in weekly rent (currently interest rates are low or falling)

Lets face it, the longer you put it off the dearer it will get. History has shown that property values are likely to climb steadily higher, so if you look ahead 5 years, would you rather be renting still or settled into your own place? For me, renting VS buying is an easy decision!

If you would like to compare the options available to you give me a call at TWM Finance for help.

By Chris Howard, Mortgage broker at TWM Finance