Why Renting Could be the Best Thing for You

There is a saying out there, “Why rent and pay off someone else’s mortgage when you could be paying of you own?” Seems like pretty sound advice, doesn’t it? Except that things aren’t always the way they seem. What a lot of people fail to consider is that there are vast differences between renting a property and actually buying it.

A Cautionary Tale

An acquaintance of mine, let’s call him Ted (identity disguised to protect the dummy), used that very saying about owning a property and paying off your own mortgage on me. I advised Ted not to do it as the mortgage installment was bound to be higher. He had been living in a place and paying rent of about $1000 per month.

He ignored me and bought the house. The mortgage was $2000 per month and he was now responsible for repairs on the house and taxes, etc. Within 6 months, he admitted that he’d made a big mistake – he simply could not afford the place and he sold it a short while later.

Fortunately for him, he did not lose much as he got a bit lucky with the market timing. It certainly cost him a lot of stress, but when it was all said and done, it could have turned out a lot worse if the market had moved the other way during those 6 months.

This may seem like an extreme example but it does happen to a lot of people – especially first time buyers. You simply don’t know how much extra expense being the owner of a house can bring.

When Renting is the Better Option

Even if you can easily afford the mortgage and extra costs, here are some other reasons why you might want to rent instead of buy:

Your Life Could Change

Have you settled down in the town you are living in and are happy there or do you yearn for a bit more excitement in your life? Have you found the career path that suits you to a tee? If not, you probably should not buy a house – what happens if you have to leave?

This happened to another acquaintance – let’s call him Tim. He bought a house and got married 6 months later. His company then moved Tim to Australia and they bought a new house. They figured that the old house would sell fairly quickly.

That was a few years ago and they are now battling to pay both mortgages. They are stuck – both houses are mortgaged to the maximum and their new home needs some repairs.

I know that this is an extreme example but it just goes to show what can really happen. As a tenant, you have a lot more flexibility when it comes to moving.

You Can Just Barely Afford it

Here I also blame the estate agents – they always seem to show you dream properties that are a little higher priced than what you can truly afford. If the installment of the house that you are considering buying is at the very top end of what you can afford, carry on renting.

Will you be able to enjoy your new home when the payment is a stretch? What if some urgent repairs are needed? How will you handle the property taxes?

In this case, you are better off continuing to rent.

You Can Rent in a Better Area

There are areas that are very desirable to live in and, as a result, homes there sell at a premium. You could still possibly afford to rent a home there and enjoy the benefits of the good area without the headache of having to come up with a huge mortgage payment.

You Need to Know What you Are Doing

Buying a house is no small matter and requires some research into the area that you are considering. While houses usually appreciate in value, if you choose the wrong house in the wrong area, you could actually lose money when it comes to selling, or might end up, like Tim, with a house that will not sell at all.

There are advantages and disadvantages to both renting and owning a home. It can’t be reduced to a simple little saying and all the pros and cons should be given due consideration.

Life Insurance – Because Their Lives Depend on It

Life insurance is not really something that we like to talk about much – after all, who of us wants to think about our own mortality? Having life insurance is, however, extremely important – especially if you have a family. If something happens to you, the emotional and financial strain on your family can be crippling, preventing them from making the most out of life.

Many of us put off this issue because there are more important issues to deal with. Perhaps your schedule is too hectic to take time off to see an insurance broker or shop around, or perhaps you are concerned about being pressured into making a buying decision. These are all valid reasons but they do not get you any closer to ensuring that your family is taken care of in the event that something happens to you.

That’s where Quotacy.com comes in. Quotacy.com makes shopping around for life insurance a quick and easy process – the site is available 24 hours a day, 7 days a week. You can use it at whatever time suits you.

Simply use the online calculator provided to determine how much insurance you need, complete your details and you will be provided with the best matching quotes in seconds. There is no running around or endless phone calls and no time wasted.

The site is user-friendly providing simple step by step instructions. It has been designed with the layman in mind – you do not need to know anything about insurance to use this site.

The online needs analyzer makes it easy to determine how much insurance you need – input details such as income, outstanding debt, goals, etc. and you can be sure that you will end up with a quote that is perfectly matched to your needs.

This, in turn, means an end to paying over-inflated premiums for policies that contain benefits that you will never use. You will get a quote that is affordable and can be assured that you will not end up under- or over-insuring yourself.

The key is in completing the online forms as accurately as possible – the more details you provide upfront, the better the quote will be in the end.

By dealing with a brokerage firm, not the insurance companies directly, you have access to a range of products from various companies, ensuring that you get the best possible quote.

There is no pressure to buy either, you are only asked to provide contact details if you do decide to go ahead with the plan – should you decide not to take up the quote, you will never have to provide your contact details at all.

The site provides a comprehensive “Question and Answer” section for users. Should you need more assistance, you are able to contact the company either by phone, by email, or by visiting their offices.

Should you decide to apply for the policy, Quotacy caters to your preferred method of contact. You can either start your application online right from the quote screen on your smart phone, tablet or PC, or you can request a fillable pdf to complete on your own time, for those who prefer to do things the old fashion way. And of course, you can always call and answer the application questions over the phone.

Lastly, a big plus compared to other life insurance agencies is the fact that Quotacy double checks every application before it gets sent to the specific insurance carrier you were quoted with, and has a professional underwriter see if any health or lifestyle characteristics you’ve listed will be a better fit with a different carrier other than the one you chose online. This ensures that you always get the best price the first time around saving you time and money. Quotacy has built its business around catering to busy modern consumers in any way they choose, to make buying life insurance enjoyable.

It is like having your own personal insurance broker on call.

Do I Need Private Health Insurance When I Turn 30?

The Lifetime Health Cover initiative is designed to encourage citizens to take responsibility for their ongoing health by obtaining hospital insurance earlier in their lives and maintain it as they grow older.

While holding a private health insurance policy is still completely optional in Australia, individuals who decline to purchase hospital cover by the 1st of July following their 31st birthdays will incur a penalty known as loading if they seek out coverage later in life, which adds a 2 percent premium to the cost of cover for each year beyond 30 up to a maximum of 70 percent.

Loading

The loading system works to reward individuals who take out policies early in life by offering preferable rates. For example, someone who takes out health cover at age 30 as recommended will pay 20 percent less than someone who waits until age 40 to take advantage of the Lifetime Health Cover initiative. However, even if loading is incurred, it is removed from the premium after it has been paid for 10 consecutive years.

Family policies calculate loading slightly differently. Policies covering couples and families calculate any required loading by determining the average value of the two adults’ loading penalty. For instance, if a husband has 40 percent loading and his wife 0 percent because she met the suggested guidelines at age 30, the aggregate loading of the family’s Lifetime Health Cover loading will be set at 20 percent for the next 10 years.

Exclusions

While avoiding loading penalties requires that cover be maintained on a consistent basis, there are some exceptions to this rule. One of these is a gap in cover exclusion, which is a provision designed to exclude small intervals while changing providers. An individual can be without cover for non-consecutive periods totaling 1,094 days (2 years, 364 days) without affecting loading levels. These days are known as “Days of Absence,” and if this limit is exceeded, a 2 percent loading charge will be assessed to the applicant upon their next coverage period and again for each year the coverage is lapsed without merit.

Another exception to the rule involves voluntary suspension of membership. If a policyholder is able to agree with the insurance provider to enact a short suspension in coverage due to temporary inability to pay, this period of suspension is not reflected in loading calculations. Overseas travel is also excluded from the calculation of Days of Absence if the insurance coverage is canceled in order for the policyholder to travel abroad for at least one calendar year.

While private health coverage is not required by law, it is certainly encouraged by legislation. It’s always wise to compare your health insurance options, to find the best fit for your own situation. The Lifetime Health Cover initiative is designed to provide a network of care to every citizen, and making use of it early can prevent paying much more for it when needed.