Sell or Not to Sell This is the Question
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It turns out that good debt is great as long as you can afford the payments. I got to a place where I could no longer afford those and had to come to the dreaded reaslisation that I could no longer keep my house. It wasn’t only the mortgage. The rates (property taxes) were starting to pile up as well, I kept missing my house insurance payment and it just became a complete stressful nightmare.
I’m a child of property ownership. It has been drummed into me for a very early age that you had to own your home. You had to have it to leave to your kids at the end. It was the be all and end all of EVERYTHING.
I have owned houses as soon as I could and raised my family in houses owned (or being paid off). I felt this was terribly important to give them the security they needed. With one parent down it was even more important for them to feel safe and secure in their home environment.
Now it’s different. My last child has started university and is looking to move out on his own (sharing with friends of course – ah the rite of passage – remember the first time you moved out?).
So it became obvious to me, after a lot of tears, soul searching and prying myself away from my own emotions and beliefs, that I really didn’t need to own a house anymore. All my kids were now out in the world and housing and feeding themselves (or soon to be in my son’s case). They were adults. They didn’t need that sense of security I had given them. They were having and ready for, their own adventures.
So it was with a heavy heart and trembling hand that I contacted the real estate and put the house on the market. The maths was the final decider.
Current mortgage weekly repayment $430.00
Rates (Taxes) weekly $65.00
Insurance: $20.00
Maintenance/Upkeep $50.00
TOTAL WEEKLY $565.00
Renting is as follows:
Rent per week $365.00
Insurance (Contents) $ 7.00
Rates (Taxes) $0.00
Maintenance/Upkeep $0.00
TOTAL WEEKLY $372.00
So by choosing to rent I was saving $193.00 a WEEK
That, to me, is a helluva lot of money, and probably to you too. I also don’t have the stress of being locked into a property. If the first one doesn’t work out, I can move, much more easily than if I own. If I bought a house again I would also be up for Stamp Duty. This is a hidden cost that I think is not factored into those buy and flip deals you see everywhere. I will be talking about those strategies in another post.
After paying off the mortgage I will be left with a little bit of cash to invest which I will talk about in other posts.
So I think it’s worth doing some basic maths, it only takes a few minutes, to see whether owning or renting is right for you financially. I’m not going to get into the emotional side of things, as owning a home is a very personal and passionate topic. But it might be worth stepping back from those emotions for just a minute to have a look at the financial side of things, just to be sure you are making an emotional decision rather than a financial one to remain a home owner.
When to sell? That is a whole other blog post where I will go into detail about the market as at 2018, what people think, the statistics and general advice regarding timing of selling.
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