Renting versus buying – what is the best property strategy for your generation in today’s market and why?

“If you decide not to buy, you will rent until you die.”

There, a catchy jingle that says it all. (But also proves I’d be an AWFUL poet.)

Like that bad dream (complete with Freddy Krueger) that you can’t wake from, renting will haunt you in later life. (As will those 1987 photos of me and my mullet.)

Generation X is in the home-buying zone. It can be a scary decision, signing up for a loan that is many multiples of your salary.

But buying has huge benefits. The major cost of putting a roof over your head will end one day. Over time, you will develop equity, from the property’s value rising and the loan being paid down. And putting your savings into an offset/redraw account is a tax-free return – the best kind.

Mortgages are usually for 25 or 30 years, but rising incomes means the average home loan is usually gone by year 15. From that point, there’s really only utilities, rates and some upkeep to pay.

If you rent, you’ll get your accommodation cheaper up front. But if you never buy, you face a never-ending increase in your cost of living.

That said, rent money isn’t dead money. It is a relatively cheap – at least for the first 15 or so years – place to stash your stuff.

I’m a fan of buying. The equity you develop is the best form of wealth to have to then invest further to create real wealth, through the purchase of shares and property. And to buy old photos of mullets off friends so they can be burned.

Bruce Brammall is the principal adviser with Bruce Brammall Financial (www.brucebrammall.com.au) and author of Mortgages Made Easy.