[charlottesmum04]

We currently rent a large large house for $450pw. 5 bedrooms, 2 bathrooms over 3 floors, pool, double garage, water views the works. The idea being that we wouldnt buy for 5 years when the older kids were moving away for uni and we only had the youngest daughter ( 50/50 shared custody) and the one i am currently expecting. We thought then we could then look at buying a more affordable 3 bedroom house rather than a big house like what we currently rent with a more affordable mortgage. We have a pretty stable rental with 1 year leases and are allowed pets and to do anything to the property we want to ( put fences up, paint walls, put picture hooks up) so our rental conditions are pretty good.

However the other thread had me thinking about just what we could afford right now if we were prepared to downsize for a mortgage. I so shouldnt have looked....

There is a 3 bedroom 1 bath, 6 car accom house about 5 streets from the beach for offers over $205,000. While the kitchen could use some work it is livable, and the rest of the house is neat and tidy. But would mean that the 2 girls would have to share a bedroom and i have no idea where this one ( due in nov) would go once she outgrows our room. This house is literally about 1km from our current house so not much in terms of moving area's.

My question is WWYD? Would you sacrifice the big house for a mortgage security? Or am i dreaming and we should stick to our original plan?

I should probably add that in about 5 years we were expecting to have to pay about $300k to get what we were looking for so $205k is a good buy.

Just as an aside we dont do debt at all. We dont have credit card, car loans, personal loans etc... We have always said if you cant pay cash you cant afford it but think a mortgage should be our one exception.

[SplashingRainbow...]

Would it be possible to buy the $205k house and rent it out? Stay where you are for a few more years then move into the house you own?

How much deposit do you have? What would the loan repayments be and how much rental income could you bring in?

[kpingitquiet]

Can you move 10 streets back from the beach and afford a 4br/2ba?

[I*Love*Christmas]

Wow $205K is great. I think the reason a lot of people don't like renting is the lack of security but if you have been there awhile and things are going great I would probably stay and do what you originally planned. Would the older kids be able to fit in this house now?

We pay $400 a week for a 4 bedroom house. We are saving to buy but houses in this area start from about $450,000 and that is for something very basic. Means we will have to save longer. I can't wait to get into our own house and would jump at the chance if a house came up at the right time but we have had a very unstable rental history with owners selling houses we were renting etc.

[premmie_29weeks]

Personally I'd be buying the good deal house, does it have potential to extend perhaps down the track?. I've never rented, we prefered to buy and pay off a mortgage and build some equity as security for the future

[Dionysus]

I would probably try and buy it, then rent it out for a few years. But, it probably depends how long you will all be squished into the smaller house if you moved now. If it's only for the forseeable future, I would be getting that foot on the property ladder

[Ehill]

My husband is an acct and invest mgr, he thinks the house/mortgage obsession is plain madness. We rent purely for financial reasons and are miles out in front. People say rent money is dead money, well we say stamp duty money, interest, land tax, rates, maintenance money is dead money.

So if you are happy keep renting. Or if you are happy to live in a 3 bed house worth 200k rent one, rent would be about $200 per week!

Having said that, DH is an invest mgr so he invests our money in other ways that makes more money rather than sinking it into a house. I realise not everyone has that ability.

[Femogan Boop!]

My husband is an acct and invest mgr, he thinks the house/mortgage obsession is plain madness. We rent purely for financial reasons and are miles out in front. People say rent money is dead money, well we say stamp duty money, interest, land tax, rates, maintenance money is dead money.

So if you are happy keep renting. Or if you are happy to live in a 3 bed house worth 200k rent one, rent would be about $200 per week!

Having said that, DH is an invest mgr so he invests our money in other ways that makes more money rather than sinking it into a house. I realise not everyone has that ability.

I love having my own home. Maybe I could have seen a better return on the equivalent amount of money I've invested in this house, but the benefits of home ownership are often more emotional than financial.

But I can see your point if you're considering it purely from an investment angle.

[Dionysus]

Ehill, I have read some comparisons between rent v m'gage.

As you say, if all the extra you save via renting (rates, interest etc) are invested elsewhere you can certainly come out in front at the end of a 25/30 year period.

DH and I are not that savvy, but I can see how it could happen.

Of course, for some the inconvenience of not being able to make changes in your home, the uncertainty of staying in the same rental, do need to be taken into account.

I would be happy to rent, DH wants the Australian Dream

[**Xena**]

I personally would buy the cheap house but we are a family of 5 living in a small house and I am quite happy to do so. We managed to snap this house up for $155K right before the second housing boom and I am so glad we did. We pay $250 a week.

With the money you save on rent and the extra money you think you would have in 5 years you could probably afford to extend if you wanted