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Renters v Buyers please explain this
Topic Started: 16 Aug 2014, 10:20 PM (2,313 Views)
noopsy05
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Me and my wife purchased a house around 4 years ago in melbourne (25mins for CBD), borrowed $370,000. We have had an offset account connected to the loan the whole time. 4 years on we have brought the loan down to 300,000 and have just under $150,000 saved up in offset account. The interest (dead money) what the loan charges us every month is less than $800 thanks to our offset account.

I am just wondering how are people trying to tell me renting is better than buying when the only dead money I lose is less than $800 when the average rent (dead money) for a 4br 2 bt home is roughly $1500.

I pay $600 a week repayments on the loan but any money what goes to the bank after the interest is charged is coming off the princable of the loan so its not dead money because its paying off something I will own which to be honest, will most likely not drop in price....but lets not start talking about %40 crashes.......we will assume prices will not move.

Also I have a life, spend up, and holidaywith my family.......
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Bardon
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Your right.
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peter fraser
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noopsy05
16 Aug 2014, 10:20 PM
Me and my wife purchased a house around 4 years ago in melbourne (25mins for CBD), borrowed $370,000. We have had an offset account connected to the loan the whole time. 4 years on we have brought the loan down to 300,000 and have just under $150,000 saved up in offset account. The interest (dead money) what the loan charges us every month is less than $800 thanks to our offset account.

I am just wondering how are people trying to tell me renting is better than buying when the only dead money I lose is less than $800 when the average rent (dead money) for a 4br 2 bt home is roughly $1500.

I pay $600 a week repayments on the loan but any money what goes to the bank after the interest is charged is coming off the princable of the loan so its not dead money because its paying off something I will own which to be honest, will most likely not drop in price....but lets not start talking about %40 crashes.......we will assume prices will not move.

Also I have a life, spend up, and holidaywith my family.......
That's pretty impressive savings - well done.
Any expressed market opinion is my own and is not to be taken as financial advice
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doubleview
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With the vague details it looks as those you are perhaps a drone !

keep going drone enjoy your robot life!
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noopsy05
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peter fraser
16 Aug 2014, 10:43 PM
That's pretty impressive savings - well done.
that 4 years me and my wife were 25 - 29 both working full time earning a combined income of $150,000 (before tax) a year. $30,000 goes to the loan, which gave us enough to save, also enough to go on holidays to fiji, SE asia and America and do soical activities. We dont hsve the best cars though which we dont care about.....
doubleview
16 Aug 2014, 10:48 PM
With the vague details it looks as those you are perhaps a drone !

keep going drone enjoy your robot life!
the typical bear answer. Me and my wife have been on a overseas holiday every year and now have a baby on the way, robot life indeed.....when im living for free in 5 years we will see whos living the robot life....
Edited by noopsy05, 16 Aug 2014, 11:05 PM.
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Josh
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Something about those numbers doesn't add up. $150k income after tax is about $420k for the four years. you are saying you've paid off 70 and saved 150 so $220k. But wait there is more, you still had to pay interest on that loan, by my guess would be about $70k . That leaves you about $130k for 2 people to live on for 4 years - $16,250 each. Obviously this is averaged so it'd be worse in the beginning and better now.

I'm sure I could live on $16k a year, but you aren't taking a holiday to fiji every year on that. I'm not saying the premise is wrong, buying ends up better in the long run and the RBA agree's, but lets not over sell it here...
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Jimbo
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noopsy05
16 Aug 2014, 10:20 PM
Me and my wife purchased a house around 4 years ago in melbourne (25mins for CBD), borrowed $370,000. We have had an offset account connected to the loan the whole time. 4 years on we have brought the loan down to 300,000 and have just under $150,000 saved up in offset account. The interest (dead money) what the loan charges us every month is less than $800 thanks to our offset account.

I am just wondering how are people trying to tell me renting is better than buying when the only dead money I lose is less than $800 when the average rent (dead money) for a 4br 2 bt home is roughly $1500.

I pay $600 a week repayments on the loan but any money what goes to the bank after the interest is charged is coming off the princable of the loan so its not dead money because its paying off something I will own which to be honest, will most likely not drop in price....but lets not start talking about %40 crashes.......we will assume prices will not move.

Also I have a life, spend up, and holidaywith my family.......
It is just a simple matter of adding up all of your outgoings and deciding which will give you the best result in the long term.

Nobody can answer your question definitively because if they could, this forum would not exist and there would be no property market.

Sometimes, renting is better than buying and sometimes it isn't. I have been on both sides of the fence and it is to do with what will happen to prices and rents two or three years down the track that makes your choice a good,neutral or bad decision.

If house prices do nothing, then there is no advantage in either buying or renting.

If renting was proven to be always better than buying, everybody would rent but there would be nobody to rent from because nobody would buy.

"Renting is good value" is the opposite of saying "Property always goes up in value"'

Sometimes one is true and sometimes the other. Never both at the same time and neither with any degree of certainty.

Meanwhile, may I ask you?

Will gold go up or down tomorrow?



Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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noopsy05
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Josh
16 Aug 2014, 11:35 PM
Something about those numbers doesn't add up. $150k income after tax is about $420k for the four years. you are saying you've paid off 70 and saved 150 so $220k. But wait there is more, you still had to pay interest on that loan, by my guess would be about $70k . That leaves you about $130k for 2 people to live on for 4 years - $16,250 each. Obviously this is averaged so it'd be worse in the beginning and better now.

I'm sure I could live on $16k a year, but you aren't taking a holiday to fiji every year on that. I'm not saying the premise is wrong, buying ends up better in the long run and the RBA agree's, but lets not over sell it here...
$150,000 was rough, it was $168,000 the year just gone. Holidays are pretty cheap, espically the fiji and se asia one...also just under $150,00 saved
Jimbo
16 Aug 2014, 11:36 PM
It is just a simple matter of adding up all of your outgoings and deciding which will give you the best result in the long term.

Nobody can answer your question definitively because if they could, this forum would not exist and there would be no property market.

Sometimes, renting is better than buying and sometimes it isn't. I have been on both sides of the fence and it is to do with what will happen to prices and rents two or three years down the track that makes your choice a good,neutral or bad decision.

If house prices do nothing, then there is no advantage in either buying or renting.

If renting was proven to be always better than buying, everybody would rent but there would be nobody to rent from because nobody would buy.

"Renting is good value" is the opposite of saying "Property always goes up in value"'

Sometimes one is true and sometimes the other. Never both at the same time and neither with any degree of certainty.

Meanwhile, may I ask you?

Will gold go up or down tomorrow?


i dont know anything about gold or the share market.
Edited by noopsy05, 17 Aug 2014, 12:06 AM.
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Jimbo
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noopsy05
17 Aug 2014, 12:04 AM
I dont know anything about gold or the share market.
Then don't buy Gold or shares.

You could cry in ten years because you didn't buy gold but you could just as easily laugh at people who did buy gold (it depends on what the market does between now and then).

Deciding between buying or renting property is exactly the same. There is no guaranteed outcome either way. You might win, you might lose.

If there was a certain answer either way, everyone would follow it and we wouldn't have a market anymore.

For every person that says now is a good time to buy, there is another that will say "no it isn't".

Who is right and who is wrong can only be answered with the passage of time.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Chris
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noopsy05
16 Aug 2014, 10:20 PM
Me and my wife purchased a house around 4 years ago in melbourne (25mins for CBD), borrowed $370,000. We have had an offset account connected to the loan the whole time. 4 years on we have brought the loan down to 300,000 and have just under $150,000 saved up in offset account. The interest (dead money) what the loan charges us every month is less than $800 thanks to our offset account.

I am just wondering how are people trying to tell me renting is better than buying when the only dead money I lose is less than $800 when the average rent (dead money) for a 4br 2 bt home is roughly $1500.

I pay $600 a week repayments on the loan but any money what goes to the bank after the interest is charged is coming off the princable of the loan so its not dead money because its paying off something I will own which to be honest, will most likely not drop in price....but lets not start talking about %40 crashes.......we will assume prices will not move.

Also I have a life, spend up, and holidaywith my family.......
$150k in an offset after 4 yrs, I'll go out on a limb and say YOU ARE FULL Of SHIT!!!!

Go troll somewhere else
Edited by Chris, 17 Aug 2014, 12:28 AM.
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