Aussie FIRE | Financial Independence Retire Early 16. How to calculate whether to rent or buy your home
Jul 5, 2024
In this podcast, the hosts delve into the financial considerations of renting versus buying a home for FIRE strategies. They crunch numbers to determine the most financially sound decision, exploring factors like mortgage rates and moving costs. The episode also discusses tax optimization, leveraging home equity for investing, and personal reflections on the decision-making process.
AI Snips
Chapters
Transcript
Episode notes
Run Your Own Numbers First
- Build your own spreadsheet and test assumptions before deciding to buy or rent.
- Small changes to inputs (rates, yields, fees) can flip the recommendation quickly.
Back-Of-Envelope Sparked Deep Analysis
- Hayden compared his rent (~$550/week) to an estimated mortgage and started modelling the trade-offs.
- That back-of-envelope comparison triggered a deeper spreadsheet analysis for his decision.
Include Recurring Property Fees
- Account for ongoing ownership costs like strata, rates, insurance and repairs when comparing to rent.
- Avoid properties with high recurring fees unless the value proposition clearly offsets them.