A few months ago I was flicking channels and came across the Hack Half Hour on ABC 2 (Monday nights) where they were having the rent or buy property debate. Renting a home or buying a home are of course the two traditional methods for paying for accommodation but there are other methods such as cooperatives or not paying at all such as squatting (God forbid!). In the debate they covered aspects such as working really hard and having no fun in order to pay off a mortgage and the more carefree, less burdensome style that comes with renting. I would suggest there is a happy medium. There is no need to mortgage yourself the hilt and pay it all off in ten years and neither is renting easy and cheap with rents always going up. They questioned whether rent money is “dead” money as real estate agents would have you believe. Someone suggested that the interest we pay to banks with a mortgage is also pretty “dead”.
Since then I’ve been doing a lot of thinking about our home owner status. Obviously whether it’s better to rent or buy is totally dependent on your taste and situation and one is not better than the other.
We bought a modest home in the inner suburbs of Adelaide nearly eight years ago and we are glad we did. Owning our own house has allowed us to do many things we wanted to do that we couldn’t have done renting. Here are few reasons we love owning a house…
Energy saving: we have been able to install insulation in the roof and install ceiling fans in the lounge and the bedroom, both lessening the need for the air conditioner and the heater. We have installed a gas heater so there is no need for power sucking electric heaters. We have planted trees in front of the two west facing windows to provide shade in summer.
Garden: while you can plant a vegetable garden in a rented property, it doesn’t make much sense to plant fruit trees since you may not be around to reap the benefits. We have a large vegetable garden with raised beds and we have spent years adding to the soil to get it right. Over the years we have planted an apricot, a peach, an apple, a pear and a lemon tree. We know we’ll still be reaping the fruit from these and the benefits of the improved soil in the future.
Decorating: a small consideration really but it is nice to be able to paint rooms the colour we want and hang pictures were we want without having to ask. Many landlords will allow renters to do these things anyway.
It’s ours for good: our little house has its idiosyncrasies but we are fond of it. It’s solid house in a nice area close to the tram, the city and the beach. Since we own it, we won’t ever have to leave unless we want to.
Wages go up, mortgage stays the same: Over a 25 year mortgage, your payments are roughly the same (with variations due to interest rates of course) every month over the whole 25 years. In 10, 15 and 20 years’ time your payments will have roughly the same dollar figure as they do now. Wages, however will increase over that time due to inflation so the fraction of your wages spent on the mortgage will lessen considerably. That can only be a good thing! Not so with renting. Dollar figures for rent will always increase with inflation along with your increase in wages due to inflation so the fraction of wages spent on rent will remain the same.
The “Great Australian Dream” of owning property does make some kind of sense but to us it isn’t so that we can “own our own bit of property” or “have the security of bricks and mortar”. We can’t take it with us when we die and our security rests in something bigger, God.