Owning a property is cheaper than Renting in Sydney
Compare the median list prices of houses or units and the median weekly rent on a 2 bedroom unit in some major suburbs. In Blacktown or Mount Druitt for example , this is renting out for around $350.00 to $370.00 per week. You can buy a unit in Mount Druitt or even a house for less than $250,000 dollars. This will get a good $370.00 return for your investment.
Total costs to own a home include mortgage of principal and interest, insurance, property maintenance or maybe strata fees. These are based on the smallest home loan. Hence, those rent returns show owning real estate still makes more sense.
Most aspiring home owners are weighing whether to buy or rent on today’s market. Or take advantage of dropping home prices and low interest rates, or perhaps just continue to rent until our economy becomes stable.
Today, there is a prevailing buyers market. But saying this we have to look at the other avenue of the property market. The demand on rental property pushes the rent up and short fall on houses can only mean house prices can also go up because of the demand for properties.
So the question here is “Should you buy or rent?”
Buy-rent calculation is just one part of the decision making process. There are more factors to consider- like how long you plan to live in that home, whether you have cash for deposit or legal costs. Can you sustain the loan? Will it benefit you on tax claims? These are just examples of questions you need to ask yourself because at the end of it all, it’s a matter of your own choice.
Even if it is cheaper to rent a home, it doesn’t necessarily mean that the renters are on top and can get ahead. Paying your home or having mortgage is considered as forced savings. Unlike having your money in the bank you can easily get access to it and don’t need to close your account to withdraw some cash. While the property owners have to go to a lot of processes like taking out equity loan or refinancing, and which they will only engage in if they are really in desperate need for it.