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Big Money January 25, 2008

Filed under: Uncategorized — panthergirl @ 9:06 pm
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I'm thinking of buying a house. I'm going to look at one today. I wonder if the one that's described as "quaint and interesting" is worth looking at.

Trouble is, to get an ordinary house in any area (in NSW) these days you have to be willing to spend $ 350,000. The deposit you need for that is around $ 60,000. How are young couples on an average wage supposed to come up with that kind of money. We're lucky as we already own our home so they're willing to throw money at us and get us back into debt for another 25 years. We only needed $ 5,000 deposit and we thought that was a lot.

The interest you will pay on that amount, over 25 years is $ 400,000. It seems ridiculous and the great aussie (american) dream of owning your own home is going to remain just that, a dream, for many people.

We are only considering buying something so Lloyd can live in it when he goes to university next year. Finding a place to rent near a uni is impossible. People are offering owners extra rent to get themselves a place. So he and friends could live in this house we buy and pay me rent. Kimba may want to live there as well.

I don't know if I want to get into that sort of debt again. Ponder, ponder.


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11 Responses to “Big Money”

  1. SweetMisery Says:

    Very difficult long term choice. Good luck.

  2. Ninja Says:

    It's a goof idea, Cat. Don't look at it as debt but an investment during your lifetime (you're going to get some rent for it to offset your repayments plus capital appreciation). You'll have good tenants (ones you can actually berate if they don't maintain the place) and look, it could be an inheritance for the kids when the time comes. They'll get their foot in the real estate door at today's prices compared to the millions it would have costed them if you didn't act now.
    I'd do it if I were you.
    Just my $0.02. Go well.

  3. cat Says:

    Yes – it all seems like the right idea. And the idea was that when Lizzie finishes school here in three years time, we sell this place and move into the one we buy. And because we own this place we should come out pretty even. And as you say we'll have family living there looking after the place until then. Of course the place I saw today and like was $50,000 more than the one I set out to look at. However the cheaper one had a rusty tin roof, some damp around the bathroom and was across the road from a railway line. The other one needs nothing doing to it.

  4. cat Says:

    well after going and having a look at some places I can safely say most of them look nothing like the pictures on the real estate sites!

  5. SweetMisery Says:

    surprise, surprise. jeez There use to be laws about that. Ah false advertising that is it.

  6. Ninja Says:

    Sorry, I meant "good"; not "goof".

  7. marmelade Says:

    it's always a good investment!

  8. cat Says:

    you wonder how though when you see how much interest you're paying. Guess the trick is to get in and pay it off as quickly as you can, not let it drag over 25 years.

  9. marmelade Says:

    i don't know how things go over there, but usually the houses value tend to increase with time. so basically, at one point, if you need to sell it, at least you can recuperate your investment and the interest. but of course, ideally is to pay it as soon as possible. that's what i did and now i'm a proud owner. with the rent money i can travel all over the world.

  10. cat Says:

    The value of property seems to be increasing so much I wonder how anyone will be able to afford a home soon. We looked at some places yesterday that were in the $380,000 range and you would have had to spend another $ 50,000 on them. A young couple with a couple of kids must struggle to make ends meet.

  11. marmelade Says:

    i know, it's insane. on the other hand, as long as the world population keeps increasing, and it will, according to the statistics, the property value can only keep going up. it's unfair for most. but if you can afford to give your son a place to live, I believe you can help him worry less for the rest of his life.

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