8/9 Deciphering the Rent vs. Buy Dilemma. A closer look at your housing choices
Welcome back to our enlightening series, “Understanding Your ADF Housing Entitlements.” Next up, we revisit the age-old question: Should I buy or should I rent? This debate often sparks the saying “rent money is dead money.” But let’s delve deeper and explore the real value of each housing choice, considering Live-In Accommodation (LIA), Married Quarter (MQ), Rental Allowance (RA), and property ownership.
Renting vs. Owning: A Detailed Comparison
When considering whether to rent or buy, it’s important to take a comprehensive look at the expenses associated with each option. Let’s compare the costs involved:
Mortgage interest: $17,500
Live-In Accommodation (LIA):
Annual cost range: $2,418 – $6,968
Married Quarters (MQ) or Rental Allowance (RA):
Annual cost range: $11,700 – $15,704
The Financial Reality
Surprisingly, renting is often more cost-effective, as both renting and owning entail certain expenses. The question becomes: Do you want to allocate $2,500 per year for rental costs or $25,700 for property ownership expenses?
Strategic Housing Decisions
With this information in mind, making the right housing decision involves careful consideration. While owning a home is a goal worth pursuing to utilise your entitlements fully, Defense-provided accommodations offer an economical route. Renting through LIA, MQ, or RA helps you maintain lower expenses and save for a deposit. If you already own a property, consider living in a rental space while your owned property’s expenses become tax-deductible.
A Strategic Approach
Remember, purchasing property is a business decision, and it’s crucial to align your choices with market trends. When utilising your ADF entitlements, timing matters. Strategically using your entitlements during a booming market can maximise their impact on your financial journey.
Next, we’ll delve into the realm of DVA Compensation, understanding how this component can further enhance your property journey is a game-changer.
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