Buying a home

Alternatives to buying your home

Housing affordability is a problem that is a real issue for many people and other options may need to be considered.

Owning your own home is an excellent goal, it underpins the idea of financial stability. Home owners can future-proof housing costs, that have increased well in excess of CPI for the last few decades. Moreover, if you are able to pay off your house before you retire, home ownership removes the largest expense we face once we are no longer earning an income. Historically, houses have also proved to be an excellent appreciating asset.

But what if you simply can’t afford to buy the house you would like? This is a problem more and more people are facing. In this case, it is necessary to build wealth in other ways.

A popular strategy is to buy where you can afford and rent where you live. For those of us living in the Sydney metropolitan area, everywhere is cheaper in comparison.  The advantage of this is that you are in the property market; you will get the benefits of gearing that is synonymous with property and most people are comfortable with the strengths and weaknesses associated with a property investment.  Given that the biggest barrier to entry to the property market is the deposit, this for many may be a steppingstone strategy with the eventual goal to buy a property that you will live in.

There are some disadvantages to this strategy. One of the main benefits of owning your primary residence is that all the growth is tax free. With an investment property, there will be capital gains tax when you sell the property. There are however, potential tax benefits in the short-term.

Another potential downfall is that buying in a cheaper area may see future capital growth also be less than in the area you would like to live, resulting in the gap between where you own and where you live becoming greater over time.

If you are unable to buy an investment property, there are still other options to build wealth. A savings plan into growth assets will see you build wealth that may be used later to achieve your goal of owning your own place.  If you are able to save the difference between your rent and a mortgage repayment, you will be able to build wealth reasonably quickly. More aggressive investors may like to later gear this investment to further enhance potential gains.


If you are unable to buy a house, there are other ways to secure your future.

Author; Alex McKenzie Categories: Future Financial Services Blog

About the Author

Alex McKenzie

Alex McKenzie

Owner at Future Financial Services


  • Paraplanner at Zammit Partners Investments
  • Unit Trust Administrator at Colonial First State


  • University of Western Sydney
  • Penrith High


As a Financial Planner I help people to achieve what they would like in life. This involves helping you to identify the things in life they would like , developing plans to help achieve them and strategies to protect what you already have. We do this by providing Financial Advice to guide you through your life stages.

The financial planning process involves determining a clients current situation and financial objectives and tailoring strategies to assist in best achieving those objectives.

I am an expert in superannuation, investments and insurance, these are tools we use to help you achieve your goals.

I aim to use my knowledge of superannuation, taxation and Centrelink to efficiently use your assets and income to achieve your financial goals.

Retirement and pre-retirement planning, wealth creation, asset protection, insurance planning and estate planning are all areas of advice that I provide.

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