CHEAPER TO BUY THAN RENT
- Written by Melanie Toye, May 31, 2013
Wow, is that moment when you realise, there are some locations where it is cheaper to buy a home (i.e. pay mortgage repayments) than rent.
The increase of people wanting to rent has made it a great advantage for investors to buy a property to rent out. As well as home owners who want as low a mortgage as possible to live comfortably in their own home. Without the burden of financial stress drumming in their brains every month when their mortgage repayment is due.
With the current low interest rates, owning your own home is becoming more of a reality than ever before.
With the three year housing marketing at a low, sales are starting to take off again in a rush to buy in. It is always imperative when deciding whether to rent or buy a home, you must do the research. When considering either option, think about your world in 3-5 years time. Do you want to travel, settle down with a family or focus on the career? All these potential life moves will help you decide whether its a good time for you to buy or rent.
Other considerations to take into account include, if you want to start your own business it can be harder to gain a mortgage in the first three years of the business starting. Due to the risk to the financial provider if the mortgage cannot be paid when business is not performing to its highest standard.
Some risky players may want to sell their home and use any profits to start an investment in shares or property and rent, until the investment earnings pay for the next home deposit. Owning a home does add an asset (when paid out) to your name, as they say, rent is dead money. If rent paid is just as much as a mortgage repayment, then it would be better for you to use that money to pay for your own mortgage rather than someone else's.
Some people prefer to rent in a location that is close to work, but there is nothing to stop you from looking to buy in the same location or just on the outskirts. Resulting in a ten minute walk or bus ride to work. This way, you are closer to your work and it eliminates long hours travelling to and fro allowing you to spend more time after and before work doing what you enjoy best.
Please note when considering any of the above options it is always best to seek professional advice.
Whichever direction you decide, know that sometimes inner city properties are cheaper to buy than rent. One wouldn't normally believe this and then would not take the time to research that particular area because of the belief only very expensive penthouses and properties would be available to buy to such close proximity to the city.
The RP Data lists for Melbourne the top six suburbs that are cheaper to buy than rent. These are Docklands, Carlton, Abbotsford, Albion and Melbourne CBD. And you may be surprised in Melbourne CBD it is more affordable to buy a house.
It just goes to show, you can live where you want to live. You just have to try all avenues and be sure to include that specific location when house hunting.
To find out more information, contact our expert Mortgage Managers today on 1300 799 266.
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