Monday, 25 July 2016

Renting and Frugal

Two old cook books in perfect nick for $5.
I love the two fat ladies and their delicious
food and fun


THIS post is for renters.

So often renters can be made to feel like they are second-class citizens because they have not quite 'made it' to the top of the financial pack. Those with their own home (well with mortgages anyway) can sometimes make renters feel a little inferior...."Oh, you only rent" or worse still "What, you're STILL renting?"

OK renters - cheer up, gird your loins because the following should make you feel much more worthy.  Renters can rock at being frugal along with the best of them!


Curious shaped boxes always
make for a unique storage
solution


Renters:

  •  Don't have to worry about paying twice the price for their house due to interest payments
  •  Renters can always afford to rent a nicer place than they can afford to buy
  •  Renters never have to worry about installing new kitchens or upgrading bathrooms
  •  If something breaks or wears out - ring the landlord and keep your money in the bank.
  •  Save on a million home improvements that you simply would never be tempted to do on a rental property.
  •  No distracting thoughts about resale values or updating for the market.

Renters can still excel at being frugal.  Just because you rent does not stop you from stockpiling, cooking from scratch, furnishing your home off gumtree (seriously, the beautiful things people just give away!), being mindful of power and water usage, growing your own vegetables in containers, mending, making do, saving and practicing thrift.


The overflow working perfectly on my self watering vegetable
boxes. Unlike other wicking boxes, 90% of the bottom half is
just water - no medium or filler in this version.


Renters - Try This Tip:

Most renters can certainly afford mortgage repayments - it is usually the deposit that seems impossible to save up. Also stamp duty in Australia is pretty much the same amount as a basic home deposit....also seemingly impossible to save up. 
 
So what to do?  Well, just pretend you DO have a mortgage.

By pretending you have a mortgage, this will allow you to save a deposit for a home (or even enough to buy a country town home for cash if you are patient!). In Australia, rent is usually much cheaper than having a mortgage.....rent of $450 per week would require you to have a mortgage payment of about $600 a week for the same home (using basic average figures).  So pretend you are paying the $600 per week mortgage - just pay your rent and bank the $150 every week (that's $7800 saving per year using this example). This will require you to tighten your belt exactly as if you were in a mortgage.  

Just a thought folks.

Take care folks and stay nice.

Mr HM


7 comments:

  1. When we moved to our area 14 yrs. ago, we had no choice but to rent as housing on California's central coast is outrageous. The price of homes continues to rise--we recently saw a 1 BR, 1 BA, old, very small house (advertised as a "surf shack") in our neighborhood listed at $427,500. Rents are high, yet not as high as a mortgage payment would be. We'll be moving to a more affordable area/state in retirement in about 9 yrs.

    ReplyDelete
    Replies
    1. That is very interesting Elise. Keep us updated with these plans. I find it fascinating how housing pricing etc are so different from country to country.

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  2. As a renter, you can also move if your circumstances require it. Like taking a new job opportunity or being closer to ageing parents, etc. You just have to hand in your notice.

    Sure, you might have to pay some money upfront, if the term of your lease hasn't expired, but it works out a lot cheaper, than what you have to fork over to sell your house to move. And what if the house doesn't sell straight away?

    Plenty of upsides to renting. :)

    ReplyDelete
  3. Yes, I have felt the 'shame' of being a renter.
    I grew up with the idea that you should be paying off a home before you have kids. Here I am with 3, and 'still' renting... however, now I'd rather have it this way!
    As opposed to mortgage stress, we are 'free' to live as we choose. We don't have to worry about replacing the roof, or the broken hot water service, or the dishwasher etc.
    We can comfortably rent a nice house, or struggle to make mortgage payments on a poky, unrenovated house.

    Now that we have paid off our debts, we are banking those payments (which probably ARE the difference between rent and mortgage payments) for the future.
    One day we would like to buy our own house - in the meantime, we all fit in this lovely, 10 year old house. We may wait until we have a deposit, or we may wait until the kids fly the nest and buy a downsized home for the two of us (which will probably be paid for in cash by then!). Regardless, thanks to the nice home we have now, and the likelihood of a property price slump in the future, we are in no rush, which is a good position to be in. So long as we reject the notion that we're 'not proper adults' until we buy our own home. Safe to say, we don't care what other people think.

    ReplyDelete
  4. Hubby and I have always owned. Now in our later years, we are planning on renting--trying out different places. It's going to be really hard to leave our home, but yet I'm excited to try new things too. And yes, the point about repairs--It sure would be nice to have someone else footing the bill!
    :D

    ReplyDelete
    Replies
    1. I shudder thinking at all the money we have wasted on cosmetic redecorating and remodelling (under the guise of 'repairs') spent over the years.

      Delete
  5. Back in the 1970s we paid off our house within a few years but things have changed since then. Where my daughter lives in a mining town it was cheaper to pay a mortgage than pay rent so we helped with the deposit. I certainly wouldn't like to be buying a house these days.

    ReplyDelete

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