Sunrise hosts David Koch and Natalie Barr debate on Thursday about the merits of renting versus buying a property, here's how the exchange went down -
Finance guru Koch was advocating the merits of so-called “rent-vesting”, whereby property hunters rent where they want to live and buy an investment property where they can afford.
Koch: “Nat, it isn’t a bad way of doing it.”
Barr: “One question. Do you know anyone who’s actually done that and actually put all that money away?”
Koch: “Yes. Yes.”
Barr: “One person?”
Koch: “I have a mate who has only ever rented and owns five investment properties. I have another person ...”
Barr: “OK, there’s one. Any more? Just checking.”
Koch: “Some of my kids’ friends have done it because they can’t afford to live where they want to live so they rent there, and they’ve bought an investment property and another house ... because of course if you negatively gear the rental property, the difference is tax deductible. On your mortgage repayments, they’re not deductible.”
Barr: “But they’re negatively geared ... so in this market they’re losing money, in this climbing Sydney market?”
Koch: “No, no, no, only losing money on the cash. Trust me, Nat, I actually know a bit about this. I know about this, I’ve done all the calculations, you can throw all the hand grenades you like, but it works.”
Barr: “I’m just checking, because it’s a climbing Sydney market, so would they have lost money in this market? Who loses money in this last five years in Sydney in the property market?”
Koch: “Last month. Last month. What about Perth? What about Perth? You’re not going to win, sorry, Nat.”
According to LJ Hooker — which, believe it or not, has trademarked the term “rentvestor” — the trend of renters owning their own rental properties has exploded in popularity since 2013.
A research paper put out by the real estate firm last year found 56 per cent of rentvestors are now aged between 35-55, 38 per cent have an annual household income of under $100,000, and 43 per cent are rentvesting due to work or study.
“Contrary to common perceptions that a rentvestor is a young professional or university student, our survey found that a diverse age group rentvest,” LJ Hooker head of research Matthew Tiller said at the time.. Source:
Courier Mail &
Sunrise.
