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Thread: what % of you income fortnightly is rent/mortgage?

  1. #73

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    Quote Originally Posted by Liz View Post
    Yep, housing is expensive regardless these days. But in this area, paying $1500 in rent is probably half of what a mortgage would be if we bought it... yep.. just did a quick mortgage calc.. this house would cost us $3200 a month. Obviously that was without shopping around and doesn't take into account offset accounts and stuff... but still.. for a house worth about $450,000.. that's what we'd be up for. To get a mortgage with $1500 repayments, we'd be in a completely different area, and in a much smaller house I'm sure, or at least one that would require more $$ to do work on it.
    I would dread to think what mortgage repayments would be for this house that we rent... it's worth over a million... sure it's on a large sized block of land (nearly quarter acre) and it's only 12km from the CBD... but this is where we want to live. The house itself is old and ramshackle but that has an upside: the owner isn't precious about wear and tear Who knows... we might inherit enough to one day buy it... that would be nice. I guess one thing that influences my thoughts is that our owner treats us as equals... they know we've had investment properties too... they know we are great tenants and they want us to stay indefinitely.... they ask very reasonable rent for what the property is worth. Probably the worst thing that could happen is if they die in an accident and their family choose to sell this house.



    It will be interesting to see what happens with this global "crisis"... I feel for all the people who will most likely be retrenched and have to sell their homes and I would hope people would have seen the value in non tangible assets like education and that they always had enough disposable money to maintain their training/education. It's the unskilled labourers with a mortgage who will suffer the most I think. It's a shame that people generally only tend to see the security in 'stuff' rather the greater security a set of skills give.

  2. #74

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    ours is about 22% of our weekly net income currently renting
    our mortgage was about 60%

    we sold up as we had no life we could hardly afford food let alone our bills.

    we will rent while saving a large deposit and buy again but it will be an investment property..
    as the rent here is cheap and we can buy a normal house(3+1) for under 200k still

  3. #75

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    Like Cai I can see both sides.
    I think that interest is dead money just the same as rent is so if paying rent is cheaper then it makes sense to do so but on the other hand owning your own home is far more satisfying than renting.
    We could rent a big place in a s****y suburb or we could get a mortgage to buy one but we prefer to own all our home so we're happier with a smaller house in a not very s****y 'burb. It's nice to be able to plan and plant a garden and put in a compost heap and rain water tank. It's pleasant to be able to have pets and not need to ask a landlord and if I want I can measure my boy's heights on a door-jam. When my aunt moved home after 20 years she ripped off the panel that had her children's heights on it and put it in her new home.

    lol at the auto-censor s****y is meant to read sw.anky.

  4. #76

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    Thanks girls for all your well-expressed points!

    As I mentioned before, we have chosen not to buy, just because it doesn't suit us right now - we don't know how long we'll be in Brisbane for, and if we only stay for another 2 years, then it really wouldn't be worthwhile to have bought.

    There's quite a few well-known financial advisers out there (Kochie, Paul Clitheroe) who suggest that in the long run, you're actually better off not buying. It's based on interest money being "dead" money and the massive amounts you pay. It relies on you having the self-discipline to put away the difference between rent and the mortgage payments on a similar house. The money that is put away can then be invested wherever else, Clitheroe advocates just banging it into your super.

    Will we buy one day? Probably, for most of the reasons that Quadruple Auntie Brontide mentioned before. All of them emotional, rather than financial. As another poster noted, even when you make a few hundred thou off a house, to get any access to that money, you have to downgrade.

    I loved your comment, Bath, that "nobody can re-possess a good education"

  5. #77

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    Mine is about 70%

    I have flown by the seat of my threadbare pants this last 2 years....
    I took a gamble buying this house as sole income earner with #3 on the way, and its not been easy BUT
    If I had not done so it is very likely I would have been at the mercy of the rental market at some stage with no job, 3 kids a dog and a cat, and having the security of my own walls has been utterly priceless. The kids having pets and a vegie garden to dig in is a high priority for me. I did win the gamble in the interest rate side of things as I had locked at a low rate before the mentalness started and the fixed period ended one month before they dropped again.

    I also gambled on the fact I would possibly do it hard for a couple of years (max) if the bottom fell out of my world, which it did (I was working 2 jobs when I bought though), so although it annoys the hell out of me that I'm broke and am only paying the minimum off the mortgage but its only going to be for a few more months.
    I probably would have dipped into my deposit till it was nothing over these last years so it was certainly a forced way of saving! Blueergh. Can't wait till its over and I can actually ENJOY my house!

  6. #78

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    About 21% Gross, 25% Net on combined income. When we buy it will be approximately 39%. We're quite comfortable with this. Renting for us in the short term to save, then buying and still having over half our wage for everything else is still pretty comfortable living for us.

  7. #79

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    Ours is 18% of DF's gross income but we chose to pay 27%. - mortgage repayments.
    Last edited by Nicambhar; April 15th, 2009 at 05:23 PM.

  8. #80

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    Our rent is about 35% of income. We coul not afford to buy atm.

  9. #81

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    It's about 30% of our income renting in Brisbane.

    We are leaving - rent is getting too expensive here and too hard to get a place. Our house has just been been advertised to re rent at $80 a week more than we're paying now and they'll get it. The house next to us recently rented for $490 a week - 4br, late 70's house - nothing flash at all. We couldn't believe it.

    It's ridiculous. Going back to Toowoomba where you can still rent a decent house for $300 a week.

  10. #82

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    Regarding the finacial aspect of rent v's buy. it only makes more financial sense to rent than buy if there is a significant gap between the cost of renting and buying and if the difference is invested. If you don't have the discpline to invest/save or can't afford to or if there is no significant differance in the cost of renting v buying then there is no finacial benefit in doing so.
    In Sydeny at the moment there is a growing demand for houses at the lower end of the market because many people are doing the math and realising that the amount they spend in rent could also service a mortgage on a first home.
    A good education is a great investment but one can get that for free and have the best of both worlds. Many studies seem to show that educational outcomes are determined more by parental factors than the school a child attends. The person who got the highest score in maths in the year 12 leaving thingy in Victoria last year was an Afghan refugee who had arrived in Australia with nothing only a few years earlier. He lived in a dodgy rental home and attended a fairly run-down public school but neither of these things stood in the way of his high achievement.

  11. #83

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    Ours is 38% of our bring home money.... which I know sounds soo high when we have 6 children, with one who requires treatment every so often..

    We have been asked a few times why dont we sell our house and rent, but renting a house the size of the one were buying would be about the same...

    I consider our home a great investment... I bought the land very cheap, and built a fairly good size house when It was cheap to build... our loan has $260,000 left on it, and it sounds sooooo much, but houses in this area sell for a round $430,000, and ours is bigger than most of the others Its a beautiful area just on the edge of town, and never want to leave!!!

    So we struggle, sometimes a lot, but we'll get there when I get back to work. And if it ever gets too bad and we have to sell, we'll have a lot of play money left over!!!!

  12. #84

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    Brontide you make a good point wrt renting vs buying. Where we live on the coast, we could not afford to rent - it would actually be cheaper to permanently live in one of the beach resorts than rent a house here

  13. #85

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    We have a fairly small 4x2 that we should pay 20% on but we actually pay 29%.

    We would be paying more in rent.......

  14. #86

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    Despite renting we moved in with a cat (which was ok with the landlord) and we were also given written permission to do family daycare and make all the safety related structural changes that doing that required (I chose not to pursue it). We have also put in a vegie garden and moved and planted lots of plants. You have to choose the right property if you want to be able to live comfortably. We have also notched heights on a door frame... the owner says i can also repaint the interior if I want to. They have seen that we've made more improvements than damage and they trust us which is great. In return for the "damage" we have done we have replaced most of the falling apart curtains with brand new ones (which will stay if we move) and paid for insulation and shelving. A renting relationship has to have a fair degree of give and take. I would hate to rent from a finicky owner... infact I would actively avoid doing that.

    Regarding education as an investment: I also meant adult education, retraining and tertiary education... which to my knowledge is rarely free (although I am about to start a First Aid course which will be 100% covered by our health fund... but not free because we pay premiums of course). And from our experience prospective employees at the banks where my DH has worked are judged by what schools they attended, sad but true. I agree: ideally a good education should be free... but it's not. I also think a good birth should be free... but it's not.... a good investment is a doula or a midwife for a homebirth but they don't come as "free" as a public hospital birth... similar thing.

  15. #87

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    Bath - i think you've been lucky with the landlord you have at the moment - most aren't so relaxed as to allow you to change things as you see fit (which i understand - it is THEIR investment money) - so it's hard to equate your situation to the average rental situation. most people have to subject themselves to never being entirely comfortable cos there is always the notion of it not being theirs - they can't decorate nursery's the way they want, have to negotiate (often with difficulty) on what they deem safety issues that the landlords think can wait (fencing etc) without causing dramas for themselves as tenants. how often do we read threads here on BB about people not knowing how to get their landlord to do the most basic of maintenance?

    i looked at the financial implications of both renting and buying when i started working -i needed to get out of my parents place one way or another! i looked around, and even though housing prices were starting to climb, it still worked out to be $3 a week cheaper to get a mortgage than it was to get a rental. i got a house in better condition than the rentals i'd looked at, was able to make changes (yard clean up, fix the fencing to be more suitable for my pets etc) and knew it was mine. when DH and i got together and his brother passed away, DH inherited this house and the associated debt handed to his brother from his mum, and from his bother to him. we sold my house (for a 30k profit after two years paying mortgage on an 89k house), bought a car with that profit money, and have been paying a mortgage on this house ever since. the average rent on a two bedroom unit in the town i work in now is approximately 1200 a month - we have a four bedroom place on double block, and our mortgage is barely over 1050 a month. huge difference. yes, we have rates, but we have double the space so it's a small compromise. yes i have to travel to get to work - but to get a four bedroom place in the town in which i work, with half the land, as a rental property, is anywhere from 1500 to 2000 a month. huge difference! we choose to pay the equivalent of that rental value each month to help reduce our mortgage more rapidly and to give us a buffer when we need to use it (like when Gremlin arrives - DH will be on leave so on basic wages rather than a per km rate as he is when he works).

    there are definitely circumstances in which renting is more beneficial than buying - i won't doubt that. for us, thankfully, my job won't move from where it is. and DH can essentially work from anywhere, so owning our home (or working towards it) makes sense to us - but what we can get out here would probably be on sale for up to 6 times what it is here (in a location similar to where you live Bath) - i love being out here and having the security it gives us. plus i love that we can improve things to fit what we love without worrying about it not meeting the requirements of landlord!

  16. #88

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    Just never found it that easy to choose a rental property unfortunately. I had landlords that couldn't seem to commit to a longer lease (totally necessary for me once kids start school), or would get silly about wanting to fit aircon (even if I was to pay for it) - you can't interview the landlords the way they interview you, so you don't know if they would be as accommodating as yours Bath.
    Even when we had great landlords - and very reasonable rent with a pool and tennis court, the stupid RE agents buggered up the whole thing and peeved us off so much we jumped into buying. It did pay off for us though!

  17. #89

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    I was flicking through the RE pages just before and its interesting to see that all the Mortgagee Auctions are for great, big luxury places.....

  18. #90

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    We've rented several properties and I agree that what we have now is abnormally unrestricted... but we always got a fair idea what the owners were like from just talking to the real estate agent. We knew before we moved in here that the owner would be very relaxed... we just asked the agent who showed us around what they were like. We were totally up front. DH especially has a knack for extracting useful information out of people LOL he should be a cop! From what I observe he combined friendliness with extreme professionalism. He nicely gets to the point: "and how would the owner feel about a fair degree of wear and tear... we've got kids... you know what they are like" well I recall the agent saying "well as you can see the current tenants have kids and the owner has been very relaxed about everything... from what they have said to us they are mainly keen to get in people who will look after the garden...". That kind of conversation. I also know we had a good rental history with our other properties... which helps choosing and getting what you want.

    Y'know, in Scandinavian countries (and also France to a lesser degree) when you lease a property you can change the decor etc quite freely... rip out the kitchen and pop in a new one if you want. Shame Australia isn't like that. Yes I know it is open to people abusing that freedom but on the whole it seems to work. I wonder why it wouldn't here? If the tenant makes changes that don't affect the value of the property then why not? I can say with confidence that we have increased the value of this property... most good tenants would. Maybe it's up to all tenants to protect their rental reputations a bit better.

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