The Alternative to the Age Old Question of Renting vs Buying

rent vs buy

With house prices outpacing wage growth and reaching new highs all across Sydney many of us are starting to question how great the great Australian dream of owning your own home really is and if it is even possible.

However, many force themselves to see owning your own home as the only option, with the alternative of renting representing dead money and not building up any equity in an asset.

But in recent years in response to Sydney’s housing boom many savvy households have adopted a third alternative to renting or buying.

This alternative involves renting in your current place of residence and having a mortgage for a portfolio of investment properties.

Clearly this is an interesting alternative to the simple rent or buy decision and it does have a number of very distinct advantages.

Firstly, in the long term you will pay less in rent than in interest which makes living in your own home more affordable.

Secondly, you are still able to build equity in your portfolio of investment properties which provides you with a stable asset for your future financial decisions.

Finally, the property you select in your portfolio will often have a high return on investment as these properties were selected not because you wanted to live in them but because they offer strong capital gains and/or rental yields.

Are you now thinking about making the switch to a homeownership strategy such as this one? If you are or would like more information regarding it then contact a Sydney financial advisor who can help you determine whether or not this strategy best suits your financial needs.

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