All Topics / The Treasure Chest / Is renting better than ownership?

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  • Profile photo of ChristineConquestChristineConquest
    Join Date: 2002
    Post Count: 2

    I know this is a tough one, but I have to ask it. I’m in Sydney and am renting for a tidy sum. Would it be beneficial to buy a home or continue to rent and use the spare money I have to invest in property – + cash flow of course?

    Profile photo of ADAD
    Join Date: 2002
    Post Count: 636

    I currently own a property and am thinking about selling for cashflow potential and start renting. I guess as Steve has said to me you have to decide what you are out to do. Decide what you want to do and write it down and apply that rule to everything you want to do. If you want to own a house for yourself excellent, I suppose you also have to do the numbers on what it costs to rent versus own….Some thoughts I hope they helped.

    Profile photo of ChrisBedfordChrisBedford
    Join Date: 2002
    Post Count: 23

    Hi Christine,

    I am a renter & have been using my spare funds to invest for many years now. There are a few things to consider on this subject, some of which are not only money related.

    Some people like the feeling of security they get by owning their own home. If this perceived value is your top priority, home ownership is fine.

    If owning a home is of little importance right now & you believe you can leverage your money better by proactively investing, stay renting & get investing.

    Don’t let people guilt you into buying a home when this is not in line with your goals. This is your game.

    AD is right, you need to decide what you are out to achieve.

    Profile photo of Steve McKnightSteve McKnight
    Join Date: 2001
    Post Count: 1,763


    Just be careful not to become confused between investing and lifestyle decisions.

    If your goal in financial independence is to own your own home, then owning rather than renting might be appropriate.

    In my case, Julie and I chose to rent because we wanted to accelerate our investing success and weren’t planning to live in the CBD in our dream home anyway.

    I think Robert Kiyosaki is now the expert when it comes to acknowledging a source for clarifying whether or not your home is an asset.

    However, if you want a home and don’t think of it as an asset, rather as a lifestyle decision that is well in your means to afford and you have a structured financial plan, then what’s wrong with that?

    Ultimately I believe you need to distinguish between investing and lifestyle decisions and hope to strike a happy medium somewhere in the middle.

    Becoming financially independent is about solving money problems and achieving this balance – well, I think so anyway.

    Happy investing,

    Steve McKnight

    Steve McKnight | Pty Ltd | CEO

    Success comes from doing things differently

    Profile photo of dr housedr house
    Join Date: 2001
    Post Count: 281

    Apart from a great lifestyle decision, we have owned our home for 10 years. we had finished paying of the mortgage some years ago now and then decided to start investing. It was quite a zig zag pathway with a few errors, since we had no mentorship and learnt the hard way.
    (eg never buy anything serviced in QLD, but that’s another story.)
    The best thing about our home assett, is that we have borrowed repeatdly against it to use as deposit for other assetts and property, via a Commonwealth bank home equity (now viridian account).
    You can repay or borrow as often as you like and the minimum monthly
    payment is the interest and you don’t exceed the proerty’s borrowing limit.

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