I have mentioned that Dorian and I are looking for a house to buy. We were wondering this afternoon whether we could ask the internet to give us some advice.
We know this sounds pathetic, and in a way it is, but we also know that some of the people who visit here from time to time have a great deal of experience and knowledge in this area and we hoped you might be willing to give us the benefit of it: we understand of course that the usual caveats about financial advice apply.
It's all still very tentative. What I think we have to do is work out whether buying a house is really the most cost-effective way to put a roof over our heads, or whether we'd be better off to keep renting and invest the difference which would have been sunk into mortgage maintenance.
Which of these options is better?
Option A: get $300,000 mortgage, buy house in Moreland, wait for gentrification to extend past Pentridge
Option B: keep renting, put the significant annual difference between rent and hypothetical mortgage repayments (about $12,000 per year) into more or less liquid assets (Dorian says art collection, but let's just say ethical investments and leave it at that for the present.)
Our sums say A, but only because we took a wild guess at what a house of that kind might be worth in 2016.