as new couples.. im sure everyone goes through similar decisions as to whether they should rent a place for a lil bit until they have enough money for a deposit to buy house or should they rent for a few years, invest in something in the meantime and try to save as much money as possible so they can at least pay for half the house when wanting to buy..
what do u personally think is the best option? to buy a house as soon as one has money for a deposit or maybe rent and invest somewhere so in like 5-10 years you have a decent saving?
You might get some insight from this thread, post #3 and onwards. Lots of interesting arguments.
If you do really have to buy, i would recommend putting down a sizeable down payment (like 15-20%) so your monthly installments would be a bit more manageable. If you want to invest money somewhere for the sake of savings and hoping it to grow, i think real estate is the safest bet you can make.
renting is like throwing money away......
when you buy you are building equity plus you are banking on the property value increasing as well.
if you buy smart, you should be able to flip in a couple of years and make more than you could ever save living in a rented place.
I am sure aussie banks or FIs are almost the same as Canadian/US. There are some institutes those who tend to offer you mortgage with no money. But what you need to pay in cash is closing cost. Your mortgage remains at higher ratio and it means you pay more biweekly or monthly as compared to Mortgage with 10-25% deposit.
One more important thing to consider here is ROI. In condo or apartment ownership you do not make more money as compared to a detached house. However, if the condo or apartment is situated somewhere in “core” downtown then chances are you'll make equal amount of money as a detached house in suburb.
While owning a home means different things to different people, there are some common reasons for investing in a mortgage:
Building up equity in a home by making regular mortgage payments is one of the best ways for many people to save a large amount of money over time;
Unlike rent, the money you spend each month to pay the mortgage goes directly towards purchasing your own valuable asset;
Home ownership is usually a safe way of investing money over a long period, and, depending on location and other factors, the value of the asset is likely to appreciate over time;
When you own your own home, you no longer face problems associated with renting — no visits from the landlord, no need to renew a lease every 12 months or so, no need to ask permission when you want to make improvements; and
Many people anticipate that owning their own home will make things easier when they retire.
Buying a home is not only one of the largest purchases you’re likely to make, it can also be one of the best long-term investments — so it’s important you get it right. This means doing your homework and making sure that the property you are buying is the right one in terms of price, location, value, size and lifestyle
Well, you need to have more than the initial deposit in your bank before you take the plunge. As an owner there are other costs which you have to consider along with the monthly mortgage payment ...for ex. property taxes, utilities, home insurance, appliances etc. You don't have to worry about these as a tenant.
Also, before you make the commitment make sure your circumstances as far as location and job are stable for the next 3-5 years.
Buying is great as long as you make a smart decision of when to buy and when not to buy, what area to buy in, etc. Don't buy where the property value will go down in the next few years.
good point PCG.
while the periods where real estate investment will result in losses are few, you do not want to be the one buying just before a market crash, or buy in an area which starts decling soon after you buy it.
otherwise go ahead and buy, to keep budgets manageable, do not fall for getting the most house you can get, get a house where your payments are low enough that you have money left over to enjoy life, take vacations, buy a car, go out to eat etc.
since you are already in the market and your prioperty is appreciating with the rest of the market it would be much easier for you to trade up later than get a place from scratch in 5 years.
one more consideration, realize that buying a place sometimes can take away your freedom of movement more so than renting, so make sure that youa re okay living in that city and will have career opportunities, and also be ready to deal with selling the place etc if you do need to move to a diff city.
Ask a realtor for a projection of the area you're planning on moving to. If you know one personally it works better cause they give you the "HONEST" reasons on why you should or shouldn't move to your destination.
I moved to a city where America's football team, the Dallas Cowboys will be moving to - well from Irving to Arlington, Texas and you know what that means?
drums rolling
*donald trumps (one of my fav shows) the Apprentice is starting..
I dont know how income tax works over there but in US, a married couple owning a house will typically get money back while renters end up owing! The interest that you pay on a mortgage loan is fully tax deductible. Another really good reason to buy.