Ever been told that rent money is dead money?
With rising interest rates – the weekly cost of paying a mortgage has skyrocketed.
Most likely it is now cheaper for you to rent in your desired suburb than it is to purchase a home to live in.
Oli’s research team has analysed the median house price of over 4,800 suburbs Australia wide – calculating what the average mortgage repayment cost would be versus the current median rent for the suburb.
Due to the increase in cost of borrowing over 2022 and 2023, only 7% of suburbs in Australia are still cheaper to own than to rent.*
What does this mean to you?
If you are considering investing in property but are unsure – you can feel confident that rental demand is generally high as it is much more cheaper to rent than to own.
The areas where it is cheaper to buy than to rent are some of the areas identified by Oli as having strong potential for capital growth! This is because people will tend to buy as it is cheaper, driving demand and scarcity, and therefore pushing prices higher.
Further – because the rental payments are generally larger than the mortgage costs – these areas have higher probabilities of holding cash flow positive properties.
Also remember - the tenant and the tax man pays for your investment - so investing in property can cost you much less than either renting or owning your own home to live in.
If you live in a capital city close to the CBD and aspire to own your own home – it may make better financial sense not to purchase your own home (this is especially true if you are looking at an apartment – read about creating wealth through owning land here).
Currently renting but don’t want to take the financial risk of owning an apartment? A common strategy is to Rentvest – where you rent where you want to live and invest where it makes sense. Read more on Rentvesting here.
Want to learn more about how to take advantage of these opportunities? Ask Oli to find out more!
*Oli Research
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SUMMARY
Oli's research reveals that due to rising interest rates, only 7% of Australian suburbs are now cheaper to own than to rent, indicating strong rental demand and potential for capital growth in areas where it's cheaper to buy.
This marketing material and its contents is provided for general information purposes only. No part of this marketing material constitutes any advice (financial, tax or otherwise), recommendation or representation to you as to any decision which you should make. You should not use any part of this marketing material to form the basis of any investment decision made by you. Before making any investment decision, you should take independent advice from a professional adviser which takes into account your individual needs and circumstances. All information, opinions and estimates contained in this marketing material are subject to change without notice. We disclaim to the greatest extent possible all liability whatsoever for any loss howsoever arising directly or indirectly from this marketing material or its contents.