To Rent or to Buy
Many years ago I was vigorously advised that I had to buy my own house simply because “rent is dead money”.
The alternatives to renting – then and now – were either to empty your piggy bank (if there was anything in it) or use your savings for a deposit and front your local banker and ask him to lend you some of the bank’s money to complete your purchase.
I conducted a study about 15 years ago and tested the conclusions rigorously over a large number of years. The study confirmed that, more often than not, the weekly rent charged WORLD WIDE very closely matched the number of thousands of the unit of currency charged for rent that matched the value of the property. For example: a $1,000,000 property rents for $1,000 per week; a property worth $325,000 rents for $325 per week.
These figures came up with remarkable consistency in all currencies and ion places as far removed from Brisbane as Paris, Los Angeles, London, Melbourne, Hong Kong, Bali, and many more.
There are many advantages in owning your own home and living in it. When you add opportunity cost to rates, insurance maintenance and even interest, financial advantages do not rate.