Anyone born after 1980 has probably been told, at one point or another, that they will never be able to afford to buy a house.
Unlike our parents’ generation, us millennial folk are in a uniquely crappy property predicament whereby housing has never been more expensive.
And we’re not happy about it either with realestate.com.au finding that, despite the odds, 80% of young renters still want to buy a place one day. To do that, though, you’ll have to make some pretty hefty compromises…
In a well-intentioned (albeit desperately unappealing) bid, your folks might have already suggested moving back in with them to save for a deposit – something apparently only 40% of us are prepared to do.
Another alternative is simply giving up spending money on anything remotely fun, like Ubers, concert tickets, and food. Very tempting options, indeed.
In a way, it feels like the universe is kind of strong-arming us into accepting that we will just have to rent forever. That means retiring without having anything to show for a lifetime’s worth of rental repayments… and having to deal with landlords well into your 60s – yikes. But is renting forever really as bad as it seems?
Well, maybe not. It turns out there are a handful of surprisingly grouse benefits to renting indefinitely.
1. You’ve got sweet, sweet freedom, baby!
One of the plus sides to having no mortgage is that you are, in turn, granted a particular level of spontaneity. Whether you decide to book an extended vacay, embark on an impulsive year abroad, or even accept a job opportunity in another state, the ability to give just a month’s notice and get the heck outta your living situation is pretty damn good.
Granted, if you’re in a relationship or have kids, it’s not as simple as telling your landlord that you’re jetting off, but it’s definitely one less thing to worry about.
2. Debt free life is not to be sniffed at
No matter who you ask, living without debt is a universally good thing. Sure, eventually paying off a mortgage will feel like a monster achievement, but that’s because it is.
If you’ve ever experienced credit card debt, you already know how hard is it to repay a few grand. Try multiplying that sum by a few hundred thousand and you’ve got yourself one daunting undertaking.
The takeaway? Mortgages are massively overrated and avoiding them can be a pretty good move.
3. You are free to invest in whatever you want
Our parents have waxed lyrical about how ‘sensible’ it is to invest in property. It’s a long game, but it’ll always pay off, right? Answer: Yes and no.
Sure, property prices continue to rise (which is part of the reason we’re struggling to buy), but property can also be kind of volatile. Rather than put your life’s savings at the mercy of the housing market, if you rent, you can invest your surplus income in whatever you want.
For example, investing in shares offers you much more flexibility (thanks to liquidity) and the ability to hedge your bets by splitting your savings across multiple sectors. Renting is starting to sound smarter by the minute, huh?
4. You also avoid the sneaky taxes associated with buying and selling
Whenever you watch those home reno shows – where they take a total dump, add some paint, buy some brightly-coloured cushions and then sell the place for a pretty penny – the profit margins always seem to ignore a little something called ‘stamp duty’.
For those playing at home, stamp duty is a sizeable government tax on certain transactions (including property and vehicle sales). Every time you buy, you have to pay a fresh load of stamp duty – which gets old real quick. To put things into perspective, if you were buying a $400k home in NSW, you’d have to pay around $13.5k in stamp duty.
As soon as you start introducing investment properties into the mix, you also have to start thinking about Capital Gains Tax and, like that, there go any overseas trips you might’ve been planning.
In short, the good thing about renting is that you get to bypass the financially crippling shenanigans associated with buying a property.
Howzat for a silver lining?