Sunday, July 15, 2007

Housing Preferences

Been taking another look at Australian real estate sites for our desired location. We should be able to pay $A350-$A450 per week in rent ($US1300-$US1700 per month). These are for houses and apartments in what is known as Inner North Canberra. Snork Maiden and I currently pay $US750 and $US600 in rent each. Of course we could pay less if we either went for a smaller apartment or were prepared to live in a more remote suburb. But we want plenty of space - at least two bedrooms and preferably three, to allow each of us to have our own office space and we want to live close to Snork Maiden's work and to stores etc. so we don't need to use a car on a day to day basis if we don't want to. What I noticed was that rents on apartments in new buildings with perceived luxury features such as granite countertops and gyms/pools in the building etc. can go for rents that are higher than older but larger apartments and houses in equally good locations. So this is where we have room to be "frugal" in getting good value of money.

For example, take this one bedroom two year old apartment (In an ideal location IMO almost in the city center just across the street from where I used to live):

or this three bedroom house:

which is one block from a small local shopping center and within walking distance of Snork Maiden's work.

Which would you choose?

Buying a property of this type would cost around $A500k ($US425k) which assuming a real cost of carry of 8% would be about $US2800 per month. There is no mortgage interest deduction in Australia for owner-occupied housing but there isn't any capital gains tax on it either.

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