Own or rent??

**Big Dave** · 24th August 2006, 11:55

Originally Posted by Big McJim

Toying with the idea of selling, putting the equity from sale in high interest savings and renting until the housin bubble bursts and then buying a house for a proper price.

What if it doesn't burst? What if the stady stream of migrants and off shore investors keeps pumping money in? Not sure that it will - but wotif?

It appears unit prices are the only things not strong in AKL still. And thats about over-supply in the short term.

**Big Dave** · 24th August 2006, 11:58

Originally Posted by ManDownUnder

As CaN alluded to... keep the house, borrow against the equity and use that cash to buy another place... and now you own TWO appreciating houses...

And there is no rule that says you have to live in the house you are buying. Rent it out and get someone else to pay it off if if you have a better option for hanging your hat.

**The Stranger:Me** · 24th August 2006, 12:07

Originally Posted by Fub@r

I read an article a few years back which stated the following:

Owning a property and paying a mortgage you would end up with value "A" when you retire

If you were to rent and put the difference between the rent and what a mortgage would cost in to the bank you would end up with value "B"

Values "A" and "B" would end up being pretty similar.

The catch is that those who rent wouldn't put the difference aside and bank it as there is nothing compelling people to do so therefore they have would end up with a lower amount of cash versus the equity someone who earn from owning a home.

For the last 6yrs I have had the place I am currently doing up rented for a rental which
a) is well lower than the average market rent for this type of property and
b) covers my costs (and that is with 100% finance).

Why is that? It is crazy, why would someone rent a house from me when it would cost them the same to buy it? And in that time they would have had a significant capital gain.

I feel that bears out what you say.

Of course they would not have made a cent in that time. Because to buy a place of equal value would cost them the same amount. However they would have a large percentage of equity in their own house.

**ManDownUnder** · 24th August 2006, 12:10

So how many out there own more than one house?
edit - me = 2

Of those, how many regret it?
edit - sporadically... like when all the bills come in, but 98% of the time - no.

How many plan to buy more?
edit - me

**Rashika** · 24th August 2006, 12:14

Originally Posted by Fub@r

I read an article a few years back which stated the following:

Owning a property and paying a mortgage you would end up with value "A" when you retire

If you were to rent and put the difference between the rent and what a mortgage would cost in to the bank you would end up with value "B"

Values "A" and "B" would end up being pretty similar.

The catch is that those who rent wouldn't put the difference aside and bank it as there is nothing compelling people to do so therefore they have would end up with a lower amount of cash versus the equity someone who earn from owning a home.

Must be an Auckland thing. Mortage plus rates etc = rent for same house here, why would you bother renting when it all goes down the tube straightaway?
Oh yeah guess should say mortgage includes car and bike...much better than a personal loan

**The Stranger:Me** · 24th August 2006, 12:15

Originally Posted by NinjaBoy

You'll find that the average stay at one house in AKL is 7 years. Then they sell and upgrade or something taking the profit with them.

In general there is no profit.

Say you buy a 4 bed house for 300k and it appreciates in value by 100k in 5 yrs.

You sell that house and think hey I made 100k.

But to buy another 4 bed house of equal value will cost you 400k so where is the profit?

**The_Dover** · 24th August 2006, 12:16

I think I'll just become a pimp.

That's where the real money is.

**tomthepohm** · 24th August 2006, 12:20

Best thing i ever did was buying a house, what ever anyone says you just cant loose out on them.

Everyone always goes on about interest rates and the fact that the housing market is about to drop, but in never really does.

You cant lose on a house mate.

Ps, Dover you have to work your way up to being a Pimp, i will pimp you out and get you started if you want, there is a big market for a man with your sexual orientation.

**Big Dave** · 24th August 2006, 12:22

Originally Posted by CaN

In general there is no profit.

Say you buy a 4 bed house for 300k and it appreciates in value by 100k in 5 yrs.
You sell that house and think hey I made 100k.
But to buy another 4 bed house of equal value will cost you 400k so where is the profit?

In what you pay off over time - enforced savings.
At the start you own 5% of fuck all - every month you increase your stake and in 10 years you own 40% of a fair bit.

Which means that you borrow less for a $600k house and do the same thing or divest to other options.

The arse might fall out of everything tomorrow - who knows - historically ownership has been the path to greater security and wealth.

**Indiana_Jones** · 24th August 2006, 12:26

Wanna own when I move out from mummy and daddy's place

-Indy

**tomthepohm** · 24th August 2006, 12:27

No Indy, i hate to be the one to tell you but its not Mummy and Daddys place. It is a special place for special people.

Did you notice everyone walking arount in white coats.

**Big Dave** · 24th August 2006, 12:28

Originally Posted by Rashika

Oh yeah guess should say mortgage includes car and bike...much better than a personal loan

If your bike is secured against your house and a separate loan on the same rate it is - if it's in the mortgage amount it costs more than a finance co.
You pay a smaller amount over a longer time.

**Finn** · 24th August 2006, 12:41

Originally Posted by Motu

My lawyer sold all his properties,except one for his daughter - and now rents...also sold his business.He said to me - ''With the economic climate as it is in NZ,who in their right mind would be in business and own a house?'' I doubt he will retire a pauper,so obviously he has another plan....but interesting to see him dump his ''assets'',he's one of the smartests guys I know.

He sounds like a smart man. I'm currently doing the same except I'll keep the property. The things that really annoy me about NZ are business related and SpudChucker. So I'm selling it and thinking what I'll do about Spud.

As for house ownership, I think people get nervous about the mortgage thing. It really just boils down to cash flow and appreciation really. Buy smart and within your means. Don't get emotional and go for that dream home. And don't buy plaster houses!!!

Most of the world’s true wealth has been made from property. Bricks and mortar Son. There ain't gonna be anymore land made.