Rent and Invest?

I received the latest copy of the Money Magazine, and as you can see in the photo it has one of my favourite topics in it this month.  Should I rent and Invest in property, or buy my own home to live in and pay off?

There’s a couple of things to consider when looking into this question and that’s the financial aspects as well as the social ones.  As a financial planner I tend to focus more on the financial aspects although the social implications are still very important when developing a plan.

The key difference between the two options is that when you rent the home out you’re getting an income for it and the difference or loss then becomes tax deductible.  So depending on your income levels you may be getting at least 30% back in your tax return for the investment property.

The article goes through some numerical examples to show exactly how it works and how you can be about $1million better off by investing in property and remaining in rental accommodation.  I also have some very good examples of the figures that I use for my presentation, so if anyone wants a closer look at the options and figures just let me know.  I’m also happy to go over your individual circumstances to see if this strategy would be suitable for you.

Another point of interest as well is that rates have remained on hold again today at 2.5%.  Have a great week.