House - Rent or Buy

[Motu]

OMG WE ARE NEIGHBOURS , PAINT MY ROOF

Come and shift my cabbage tree! A great oaf like you should be able to tuck it under one arm.Why do people insist on planting trees next to houses,and in this case on the north side in front of a bedroom window,cutting out the light.I don't want to cut down such a beautiful tree...I'm gunna drag it out with the Pajero (just an excuse to use this 4x4 thing I've heard about) and put it in the hole I've dug out front.I gotta do it at night because I'm going to drop a Hoodie in the hole to give it a good start in transplanting.

[The Stranger:Me]

In theory whoever wins the election is going to cut taxes.
The 2 outcomes that I believe we will see as a result are.

With the increase in disposable income people will be prepared to borrow more and be comfortable paying a bit more for a house (and other goods too) thus I believe that we will see a firming of house prices and pressure on inflation.
The reserve bank will be trying to reign in the inflationary effect of an increase in disposable income and as usual will increase interest rates.

My 2 cents. Not a bad time to buy but would be patient for a bargain, as well as the obvious benefits it, it also helps if the rates go up and be prepared for some mortgage rate increases.
You can always fix of course.

Hey I have been wrong before - but that was when I thought I was wrong.

[WINJA]

Come and shift my cabbage tree! A great oaf like you should be able to tuck it under one arm.Why do people insist on planting trees next to houses,and in this case on the north side in front of a bedroom window,cutting out the light.I don't want to cut down such a beautiful tree...I'm gunna drag it out with the Pajero (just an excuse to use this 4x4 thing I've heard about) and put it in the hole I've dug out front.I gotta do it at night because I'm going to drop a Hoodie in the hole to give it a good start in transplanting.

DONT FORGET TO TRIM LOTS OF LEAVES FIRST , SPRAY IT WITH LOTS OF WATER , AND KEEP IT WET ONCE TRANSPLANTED, I PUT ONE OF MY DEAD CHICKENS IN THE HOLE BEFORE PUTTING IN MY PLUM TREE , SEE IF YOU CAN FIND A ROAD KILL POSSUM OR CAT

[Racey Rider]

Come and shift my cabbage tree! A great oaf like you should be able to tuck it under one arm.Why do people insist on planting trees next to houses,and in this case on the north side in front of a bedroom window,cutting out the light.I don't want to cut down such a beautiful tree...I'm gunna drag it out with the Pajero ....

Cabbage trees have a huge tap root.
I doubt even the mighty Pajero could pull out a old one. (yes thats a challenge!)
If it is small enough to get out, you would need to cut the top off completly to compensate for the massive root damage, and stop it from being top heavy. Stake it well, as the top swaying in the wind is not helpful for new roots trying to get established. it will regrow from just the trunk.
Better off just to cut it out and plant a new one.
Cut it as low as possable and paint some stump killer on it, as it will still try and grow again from the smallist piece of remaining stump. (1/4 of Roundup/Diesel).

But why would you plant a new one?? They often end up looking messy with that cabbage tree disease, and catapilar notches in them. The leaves fall and have to be picked up before mowing. Leave them for the parks.

[Lou Girardin]

Mortgage repayments have been lower than rent for the past 2-3 years, although that is changing as rental demand slows. There is a strong possibility of interest rate rises in the next year as a result of the current vote auction and we are beginning a down cycle in house prices. Normally there's a 7 year cycle - peak to peak.
If you can rent at a reasonable cost and save too, it may pay to wait a year or two.

[strayjuliet]

There are some very good points out there. I have to agree if you can buy do so its a lot less fuss owning your own home than renting, trust me mate if i could afford to buy i would no holding back but alas i can't so im forced to rent and pay dead money for something that yes has alot of potential but i can't fix it or make it my own. If you are going to get flatmates in, then make sure you can still afford the mortgage on your own in case they do a runner, you can get into alot of trouble with the flatmates from hell or the flatmates who say "oh i didnt get my full wages this week will fix you up next week" next thing you know they've moved out one day while you were at work and hello you're out of pocket. don't just take my word for it there are some real good flatmates out there and also there are some real ass-wipes. Whatever you decide i wish you much luck.

[justsomeguy]

Thanks for all the great advice guys. I guess I should set up a time with a mortgage manager or something and see how big a mortgage I can qualify for.

[justsomeguy]

Mortgage repayments have been lower than rent for the past 2-3 years, although that is changing as rental demand slows. There is a strong possibility of interest rate rises in the next year as a result of the current vote auction and we are beginning a down cycle in house prices. Normally there's a 7 year cycle - peak to peak.
If you can rent at a reasonable cost and save too, it may pay to wait a year or two.

I see what you are saying Lou, but I really dont think it will work out cheaper.

Lets take the rent for a year, lets say $150 a week(all inclusive) for 52 weeks thats 7800, lets say 8000. That's 8000 less I can save or put into the mortgage and now-a-days banks only need 5% anyway...

I don't know - hated maths at school.

Could you elaborate please?

[Lou Girardin]

I see what you are saying Lou, but I really dont think it will work out cheaper.

Lets take the rent for a year, lets say $150 a week(all inclusive) for 52 weeks thats 7800, lets say 8000. That's 8000 less I can save or put into the mortgage and now-a-days banks only need 5% anyway...

I don't know - hated maths at school.

Could you elaborate please?

Consider the interest component of a mortgage the same as rent - non-productive outgoings.
If the capital value of the house is increasing, that offsets some of the interest outgoings. If not, you are only gaining by the amount of principle reduction you achieve, which is very little initially on a highly geared mortgage.
That's why it MAY be better to wait a year or two and save more dosh, then put a larger deposit into a property that will probably be cheaper than it is now.
But get some info on current mortgage rates and compare that to rental rates for the same kind of house before you decide.
I've always been lucky enough to buy at the bottom of a cycle and did quite well when selling.
Compensates for my crap luck with vehicles.

[Big Dave]

Thanks for all the great advice guys. I guess I should set up a time with a mortgage manager or something and see how big a mortgage I can qualify for.

Do it online. Check the banks web sites.

'generally' you need 5-10% deposit and can commit no more than 35% of your gross income to repayments - that is all repayments - credit cards, bike loans and mortgage can only add up to 35% of gross.

With many first home buyers a hefty vehicle outgoing will mean the do not qualify for a mortgage.

(I designed and sold new homes and finance in a distant galaxy long long ago)

[FROSTY:Me]

My suggestion would be to hold fire about 6 months on the house buying thing.
Every indication is that the local (auckland) house market has gone soft and is gonna get worse
The best time to buy is in a slow market

[FROSTY:Me]

ohh FYI -my house increased in value by 100k in 12 months
some of that thanks to the efforts of certain KB members

[Fart]

I have never ever met a financially independent person that rents.

[geoffm]

There are a number of advantages of owning a house - one is you can customise it the way you want. Want a 2 ton hydraulic crane and 440V 3ph power in your gargre? You can have it with money and owning the house. Landlords don't normally appreciate that kind of thing. OTOH, owning a house ties you down. If you are young, mobile and have itchy feet, don't buy. if you rent, you can go for that big OE on 3 weeks notice. Overall, owning is better than renting long term.
This applies to your own house - the numbers are different if you are buying to rent out to others. in that cse, you need to compare the return with that of equally risky investments, and most residential properties have piss poor returns when compared with the risk, and you have to deal with tenants (ickky)
Geoff

[justsomeguy]

I have never ever met a financially independent person that rents.

Well then stop spending all your time looking in the mirror ....... only joking

---Yeah I see your point.