A realistic perspective on being a lifetime renter

Having lived most of my adulthood in debt, now that it’s all paid off I am strictly debt averse.  That means I use credit cards for their points benefits and cry foul at the thought of taking out any loans whatsoever.  I have sworn to make my money work for me that includes never paying a cent of interest to any lender or bank ever again.   My aim is to live a life of frugality by saving what I can, when I can and spending only on what matters to me.

This sentiment is not without it’s negatives however, for though I be touting this stuff out loud, it doesn’t always match my dreams.  The truth is I would love to own a house or unit but for the simple fact of affordability, as in I have none.  I live in Sydney Australia, one-of-the-most expensive cities in the world.  Yes indeed it’s a beautiful city but everything you’ve read about housing here is all true!  The housing costs are stupendous and unless I earn big money or win lotto, chances are I’ll be a lifetime renter.

This isn’t a bad thing considering I am single, older and have no heir apparent to steal inherit all my money.  And I am closer to 40 now than 30 where being mired in home loan debt is far outweighed by considerations such as retirement and enjoying life now when I have my health.  The cost of buying a home therefore has to be relegated to mere dream status.

Some people will  look at renting as wasted money, not me.  Firstly, it’s not as if I have a choice.  No bank with any financial responsibility will give me enough money to buy a property on my wage and besides my debt free loving self doesn’t want it!  Secondly I focus on the positives of renting as opposed to homeownership, which technically does not come about until the loan is paid of in thirty or so odd years.  In this instance the negatives of buying a house are far surpassed by the costs of renting.  There is no whopping interest, no maintenance, no other hidden costs associated with housing that one pays as a homeowner.  Quite simply I have the smug benefit of paying one rental amount per week and no more.

On the odd occasion I have conversations with people naive to my situation.  There are family members who encourage me to buy a property because they are entirely clueless.  Or co-workers who have grown up in this city with the benefit of a parent who saw what was coming and encouraged them to buy way back when it was affordable.  Thanks to dads advice one of those co-workers now owns three properties, a portfolio worth close to two million dollars.

We were conversating one day, her lauding the benefits of owning property and me rolling my eyes.  You see I don’t disagree, I consider owning property to be a wondeful thing.  I would love to plant roots down, bake my own bread in my own kitchen, have my own cute little french bulldog yap around my ankles, I’m sure you get the idea.  This is a snapshot of how  our conversation ended:

Her: I’m telling you now is the time to get in the property market.  You could rent it out and have it pay for itself.

Me:  Sure you wanna give me an interest free loan, about a half a million dollars.

Her: Mate the bank will give it you.

Me:  Only if I commit fraud.  Right now the bank will give me $200k if I’m lucky.

Her: You’ll be able to to find something for that price, easy.

Me:  Yeah it’s a car park or a retirement home.

Her: What-evs.  I bet I can find you something…….

A few moments later, a few taps on the computer and her eyes are wide open.  Initial google search reveals just as I suspected, a car park and many more retirement homes.  The look of shock in her eyes was quite funny, she honestly had no idea.  Being a dual income household, coupled with making good financial decisions at a young age paid off for her.  Now I can’t take back that time but I can start making good decisions right now and being a lifetime renter is one of them, because it’s not a bad thing, not at all.

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