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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:

Property Ownership:

Mortgage interest: $17,500
Rates: $2,000
Insurance: $1,200
Maintenance: $5,000
Total: $25,700

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.

~Integrity Team

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Legal Disclaimer: This information ('the information') is presented for illustrative and educational purposes only. It is not presented nor should it be treated as real estate advice, legal advice, investment advice, or tax advice. All investments involve risk and potential loss of money. If you require advice in any of these fields you should contact a suitably qualified professional to assist and advise you. Your personal individual financial circumstances must be taken into account before you make any investment decision. We urge you to do this in conjunction with a suitably qualified professional. Daimien Patterson, IntegrityX Enterprises Pty Ltd, and their associated trading names, companies, researchers, authorised distributors and licensees, employees and speakers do not guarantee your past, present or future investment results whether based on this information or otherwise. Daimien Patterson, IntegrityX Enterprises Pty Ltd and their associated trading names, companies, researchers, authorised distributors and licensees, employees and speakers disclaim all liability for your purchase decisions. You should do your own independent due diligence and seek the advice of qualified advisors before making any investment decision.