On the move

I’m moving house this weekend. Huzzah! It’s beautiful, bright and open and spacious, and it has room for a pool table. It’s about five minute’s walk to my favourite cafe and about five minute’s jog to my favourite running tracks.

I love it.

It has reminded me though, to remind you, to make sure that you let us know whenever you move address. We can then make sure that the tax office know about this as well, and also ASIC should you be a director or shareholder of any companies. Yes, that includes trustees.

I’m also renting this place, rather than buying it.

To me, that makes more sense at this point. I don’t need the security of a principal place of residence (PPOR), nor do I need the dirty big bad debt against one. By renting instead of buying my home, I can direct that cashflow to other investments, or to my business. It also then means that the interest on all of my debts can be deductible, and it helps my serviceability for further investments as those debts are all being used to provide an income. It’s a good system.

I was talking to another investor at the Somersoft meeting earlier tonight. We agreed that whilst this works nicely for me at the moment, and of course, for many others; there does come a time where having a PPOR – particularly a paid-off one – is worthwhile. Beyond as a starting point to get the free money, at the other end of the spectrum, heading into retirement with a debt-free home holds a lot of security. Using a little debt recycling, which we’ll discuss at a later stage, can also accelerate that option very quickly when the time comes.

There’s not necessarily a right or wrong in deciding whether to rent or buy a PPOR. As there will always be an emotional attachment as well as financial consideration, it makes the whole scenario much more circumstantial and individualised than most investment choices. But, it is still something to give a little thought to, perhaps.