There is a cultural meme in New Zealand that you “made it” or succeeded when you buy a home.
But so often Kiwis buy more house than they can afford. An excessive amount of their income now goes to servicing a property that might increase in value or might not.
But every week, every fortnight, every month mortgages, rates, bills, insurance, electricity, water, gas must be paid. It creates a
Or they buy investment property that’s cash flow negative. This creates the bizarre situation where you, as the landlord, are subsidizing your tenant’s lifestyle. Don’t pay your tenant’s rent.
You don’t need to buy a house.
Renting your home is not failure. You can rent beautiful, clean, warm apartments, townhomes, houses, and other living arrangements at a fair market rate.
The deposit you were going to put into a home can be invested in a globally diversified fund of shares and bonds. The difference between your mortgage payment and rent can be invested. Small amounts invested in assets with reasonable rates of return, over long periods of time, yield fantastic results.
One day the market will change. There will be bargains and buying a home will make sense for you personal situation. But in the meantime, don’t create a stressful and unsustainable situation for you and your family.
Rent. It’s okay. You haven’t failed when you’re renting. You can be building real, liquid net worth outside the New Zealand property market.
