When to Buy vs When to Rent

The popular narrative that 'renting is dead money' is financially illiterate. Every financial decision has an opportunity cost. Buying a home involves: stamp duty (3.5% in Qld on a $900,000 purchase = $31,500), legal costs ($2,000), mortgage stamp duty ($700), building and pest ($600), lender's mortgage insurance if under 20% deposit, then ongoing: council rates, insurance, maintenance, and opportunity cost of the deposit. A proper buy vs rent calculation compares the true cost of ownership (interest + opportunity cost on equity + rates + insurance + maintenance) against rent, and factors in capital growth. At a 5% growth rate, a $900,000 home grows by $45,000/year — this is the major argument for buying. At 2% growth, the calculation often favours renting and investing the difference. The crossover point where buying beats renting typically arrives at 5–7 years of ownership in a growing market, after transaction costs are recovered through appreciation. If you plan to move within 3 years, renting is usually the better financial decision in most markets.

Rentvesting — renting where you want to live and investing where makes financial sense — has become a legitimate strategy for younger Australians and entrepreneurs who want lifestyle flexibility without sacrificing wealth building. For someone like Matt in Brisbane: if you want to live in a suburb like New Farm or Teneriffe where purchase prices are $1.5M+ but rental yield is 2%, renting that home for $1,500/week and investing in a $700,000 house in a higher-yielding, higher-growth suburb might deliver superior total returns. You live where you want, build wealth where the numbers work. The main downside of rentvesting is psychological — you don't own your home, you can be asked to move, and you can't renovate freely. For some people, these trade-offs aren't worth it. The financial case for rentvesting is strongest in expensive low-yield markets and weaker in markets where owning and renting are more equivalent in cost.