We have all heard the old saying… “Rent money is Dead money”

I always believed this saying and just out of interest, i wanted to have a look at the market to check this theory.

You know what I found? Complete evidence that the above information is not only evidence but disgustingly true!

I mean no – I am not unhappy that there are investors in this market. They make up a pretty big chunk of my clientele.

There will always be a need for renters and investors in this market. Some people simply think that they can never afford to purchase their own property. And to some point, they are correct.

In their current situation whatever that may be, they cannot afford to save the minimum deposit to buy their first home. When they get back on track though, they are able to save enough to buy their own home. Then hopefully they buy their second.

I always say that buying your second property will always be easier then buying your first.

However, with the current government incentive on first home buyers that saying may not actually be correct anymore.

Just take a look at this example:

You could rent this property for $380 per week.

https://www.realestate.com.au/property-unit-vic-craigieburn-426828886

Or you could actually buy this property

https://www.realestate.com.au/property-unit-vic-craigieburn-131754386

For less then per month that it would cost to rent the above example.

Lets look at the numbers :

$290,000 Purchase Price + Fees and Charges + LMI (Lenders Mortgage Insurance) = $283,476.37

The repayment on this loan would be $1,426.24 per month or, if we break this down it would be : $1,426.24 x 12 months / 52 Weeks = $330 (rounded up)

The deposit required to do such a task was only $22,000. This example is of course only for first home buyers however, it paints a pretty clear picture.

I am not yelling at you and telling you that you are doing it all wrong.

What I am saying is that numbers don’t lie.

Rent money is dead money

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