By Andrea Sophocleous, ninemsn Money
Home ownership might be the great Australian dream, but renting a family home can also have its positives, writes Andrea Sophocleous.
With property prices in Australian capital cities bounding ahead in defiance of the global financial crisis, the dream of owning a home large enough to accommodate a growing family is increasingly outside the grasp of most young families.
If you can't afford to buy a family home or you don't want to live with the weight of colossal debt renting can be the perfect solution. In fact, renting a family home can give you valuable flexibility, allowing you to choose where you live in suburbs that may be unaffordable for ownership and for how long.
Percussionist Claire Edwardes and her husband own a two-bedroom townhouse in the Sydney suburb of Ashfield. But with a second child on the way, they chose to rent a bigger three-bedroom home in the neighbouring suburb of Croydon.
"With a second child," Edwardes says, "we thought our home would be too cramped and it doesn't have a backyard. We wanted to stay in the same area, but couldn't afford to buy anything bigger."
The family pays $595 a week for their much larger new home, and receives a weekly rental income of $450 for their townhouse.
"It was great to move and have all the extra space. It definitely justifies the output," Edwardes says.
"Since doing this, I realised owning your family home is not as important as everyone thinks. We're really happy here. So we don't own the house, who cares?
"I think the people who bought this house for $800,000 are getting a worse deal than we are for our townhouse, which is worth closer to $400,000."
Nevertheless, Edwardes is happy to have a foothold in the Sydney property market with the townhouse, and says she and her husband may consider buying more investment properties down the track while continuing to rent.
Real estate agent Mary Anne Cronin, of Raine & Horne Bondi Junction, has come across plenty of families who choose to rent in the beachside suburb of Bondi because they cannot afford the million-dollar-plus price tags.
"You can rent a home for $800 to $900 a week, but to buy it would cost $1.5 million to $2 million. Renting gives you more flexibility," Cronin says.
She adds it's not uncommon in beachside suburbs for people to buy affordable investment properties without views, and rent a home with otherwise unaffordable views. Rental properties near the beach are popular with tenants, therefore a smart choice for investors.
For information analyst David Low, his wife and 18-month-old daughter, buying a home was not a priority.
"There were other things we had as life priorities rather than putting our money into a deposit for a mortgage, such as paying for our wedding and honeymoon, and a trip to Europe before starting our family ," Low says.
"We hadn't gone on a major overseas trip together and we wanted to experience certain things before starting our family."
Experience and lifestyle are more important than being weighed down by a mortgage for this young family, and renting allows them to prioritise what is important to them.
"That was the unifying thing for both of us valuing experience over possessions," Low says. "It was also time for us to have a family, and we didn't want to defer it until we could afford to buy a home."
The couple would like to buy a property soon, but not necessarily a family home. "We are contemplating buying a small property that we can live in for a few years, or buying a home outside Sydney and continuing to live in Sydney," he says.
"We need to do something creative with the house we live in versus the house we buy."
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