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Follow @darrensingletonStill Searching for First Home
Back in August 2009, I posted about how I was going to be moving out of the family home. This all fell through, thanks to the vendors deciding they weren’t going to continue with the sale.
I am once again on the look out for a property of my own. I’m finding it quite difficult at the moment, having not much money currently saved towards a deposit. A few people have mentioned to me about renting somewhere for a while.
In my mind, the problem with renting is illustrated with the image to the left. By renting a property you are essentially paying off somebody else’s mortgage. I understand that there are situations where people are not able to get a mortgage – generally due to bad credit scores or even (as in my situation) not enough money to put together a 10% deposit.
I’m currently saving money wherever possible along with looking online and in estate agents windows in order to book viewings in as many properties as possible.
My reason for this post is mainly to discuss my ideas on property and being a home owner. I hope to be able to discuss my journey on this blog and keep everybody informed with what is happening.
Image Credit : Property Investment Project
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March 6, 2010
9:30 PM
I come from the other side been a home owner for around 15 years – but recently went overseas and rented for 2 years over there. Now even without having a huge mortgage I will tell you what moving back into our own home gave us the “freedom” to do:
spend 2 weekends working like slaves to get the garden under control (landlords problem normally)
pay $100 on a plumber’s call out (this would have been a landlord’s problem)
pay $2000 on minor work and painting (maintenace – would have been a landlords problem)
$600 to the council for rates (paid by landlord)
If you buy with only a 10% deposit – you won’t own the house any time soon – the bank will. Renting has it downsides sure – particularly if you have to move on when you don’t want to and some landlords shouldn’t be in business – but as a tenant you know what your outgoings are fullstop – its the rent plus whatever increases – usually around the same rent increases. If you don’t like the new neighbours you can move. If you get a new job on the other side of town you can move with a few weeks notice. If you decide to go travelling for a while you just give up the lease a lot easier than selling or putting the place out to rent.
When you do your figures remember you won’t be paying retn but you will be paying
council taxes
building insurance
repairs and mainteannce – allow about 10% of the houses value
gardening
outside house cleaning
We are selling to downsize but in my country you can’t get a lease longer than a year – if you could I would seriously consider becoming a long term renter
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Darren
Twitter: darrensingleton
Reply:
March 16th, 2010 at 9:24 AM
Thanks for your comment Lissie. I’d not thought about many of the positives you put forward with regards to renting.
I think my real reason for wanting to purchase is that (in the far future) I would have equity in the property I had been spending money on. If I was to rent, this would never be the case. Many properties at the moment cost more to pay for in rent than paying back a mortgage, so it’s possible (at least right now) even with the additional costs of being a home owner, it may work out cheaper.
Thanks again for your comment,
Darren
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March 15, 2010
1:17 AM
I think one thing people have to look at when it comes to property ownership is how it works for them. My partner and I are investors, we have several properties and currently rent. It worked out cheaper for us to rent a property than to pay off our own home. I know renting is paying off a mortage that is not yours, but how much money have you got every week to have a life?
In our case, the tax benefits far outway the reasons not to rent, we have money every week to have a life and we get the end of financial year tax refund which funds a substantial holiday for our family of four. Everybody has a different take on ownership, we chose not to be a slave to one mortage and have several working for us, do the research, look outside the square, there are plenty of options to take. Good luck
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March 18, 2010
7:53 PM
You are very lucky to still be able to live at home in order to save a deposit. By the way how old are you? What do your parents think of this? I left home at 19 however like you didn’t really want to rent at all but ended up renting for a short time before purchasing my first property.
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Darren
Twitter: darrensingleton
Reply:
March 18th, 2010 at 9:58 PM
Thanks for your comment John.
I’m actually 23, nearly 24 – I am very lucky to still be at home and I have supportive parents who are allowing me to stay home whilst I get things sorted.
If I start renting, I’ll be using money that could be saved towards a deposit when I do move out, so whilst I’m able to stay home I’ll make the most of the extra money available.
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