5 Perks To Renting That’ll Make You A Better Human (And Property Owner)
Is rent money really just ‘dead’ money? There’s a lot of pressure to own property at a young age even though it can be really hard depending on where you live *cough* Sydney *cough*. So if you’re renting and feeling like it’s a massive waste of your hard-earned cash, here are some reasons why that’s actually not so.
Property prices. Negative gearing. Housing bubble.
Do these words mean something to you? Do they send your stomach spiralling into a pit of despair?
Me too. Don’t get me wrong – I can’t wait to walk with sass into a bank and (metaphorically) slam my 20% deposit down. Or creep my hand up at an auction to hear that hammer whistle and thud in my favour.
The property market is a tough nut to crack
In the meantime though, it seems house prices are the things that are creeping up. Skyrocketing up, according to Walkley-nominated journalist and producer on The Project, Tom Whitty. Tom explains that it’s “thanks to John Howard’s halving of the capital gains tax” (CGT), which happened in 1999, combined with negative gearing that “have made houses an ideal investment”. Some, like Tom, argue that this is the reason house prices have been pushed up at an exponential rate compared with their rate of growth in the past.
We’ve got an explainer on the CGT discount and negative gearing here but, the gist is this: if you own an investment property for more than a year, when it comes to selling it, you’ll only pay tax on half of the profits earned. As Tom puts it, the CGT discount and negative gearing powers combined could well be the reason you might wind up “bidding against a baby boomer in a BMW who has no intention of living in the property”.
The thing is that most of us aspire to owning property no matter how far off it might seem for us; we still want to go in for the fight. And some of us are getting there.
But while the contention continues on, you’d have heard lots of stories of friends, family or even strangers buying property. And if you’re not at that point it can be daunting to hear. So let’s turn the conversation to renting.
Everyone always says renting = dead money. But is that really true? If you’re feeling overwhelmed by the pressure to purchase property, but aren’t quite ready, there are plenty of reasons why renting might be a better option for now.
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While it depends on your lease arrangement, renting can afford you the flexibility to travel or even move to work overseas. It’s a lot easier to pack up and piss off if all you’re responsible for involves waiting out your year-long lease, finding new tenants to transfer your lease to or doing a cheeky sublet.
Not only does renting give you the flexibility to move overseas but it can also mean that, during the key moments of your burgeoning career, you can choose to live closer to work. Imagine not having to peddle your push bike that extra 10km? Or being able to network with your bosses at after work drinks and still make it home in time to eat dinner with your cats?
Having that flexibility might just get you the kind of lifestyle you deserve in an area you can afford.
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Renting provides you with the independence you oh so crave from the parentals. While all that extra work they do doesn’t go unnoticed or unappreciated, there will most likely come a time when you need to take your living situation into your own hands.
Inner-city dwellings in places like Melbourne and Sydney might seem expensive but living in a flat or house share arrangement should ensure you can live within your means. All you need? A good budget. So jump onto Facebook groups like Fairy Floss Real Estate and Inner East/West Housemates, or start dialling your posse because it’s time to cut that umbilical cord.
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Do you know how nice it is not to worry about the cost of replacing your water heater? Or to be able to let your agent know, just by pressing a few computer keys, that your second storey toilet has decided to leak into your ground floor kitchen? They’re not nice things to experience, but to deal with, they’re a breeze! Renting means zero repair costs and the Tenants Union of Victoria has a handy guide to approaching your agent or landlord about repairs.
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Money and people learning curves
The costs of running your own home can be expensive and come as quite a shock if you’re new to renting. Bond, energy and gas provider costs, food, internet bills and more. Your phone bill is looking pretty measly right now, isn’t it? But that’s not even close to what you need to consider when actually owning a property. Throw in council and strata/body corporate fees, mortgage repayments, contents insurance and more, on top of internet, food, phone and utilities. The costs associated with renting are a stepping stone to helping you prepare for the costs associated with owning your own place.
It can also help you to figure out just who you want to live with. While stories of house-sharing horrors might flood pop culture, the reality is that it’s not so bad and you can even wind up with a new #fam. It might even be a handy way to test living with your loved one. The Australian Bureau of Statistics has reported that since 1992, the proportion of people aged 20 to 29 that are living in de facto relationships has doubled.
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You can figure out where you love living
Finally, renting can help you to work out where you want to live long term. Or maybe it just means you can live in a dream suburb you can afford to rent in but may not necessarily be able to buy in.
In any case, it can be an excellent try-before-you-buy of various suburbs, where you can get a feel for an area and work out what you value about a location. Whether that be access to public transport, parking, schools, nightlife or peace and quiet, renting in different areas of a city might just give you the time and experience to knowledgeably prepare for purchasing the home of your dreams. Imagine if you bought in a suburb you thought you’d love, only to realise a few months later it’s not what you’d hope for? Dream becomes a nightmare pretty quickly.
So, if buying isn’t an option for now, don’t panic. Keep squirrelling those savings and try to focus on the pros of renting.
Lead image: Sonia Taylor
Stefanie Italia is a writer and editor from Melbourne, Australia. She works in book publishing and has a Bachelor of Arts and a Master of Publishing and Communications.