I renewed my lease the other day (small increase to rent). 2 bedroom unit in a small group. Paying yield of approx 4.7% against equivalent purchase price.
Saving a few thousand per year on interst cost alone if I was to take 100% mortgage and buy. By renting I also don't pay:
- Maintenance costs - Council rates - Emergency Levy - Water & sewage supply costs - Building insurance (I pay for contents insurance) - Strata fees - Sinking fund payments
In this case I deal directly with the landlord, but some investors also have management fees on top of all this listed above!
Further to this prices appear to be falling in the area, so by renting I am avoiding this also.
And by renting my situation remains flexible so can move very easily, for example renting a 2 bedroom unit at the moment, but will want a house down the track. What an easy switch when it comes time (not so easy when buying).
It's a good day to be a renter. Thumbs if you agree ;)
