Your Attitude Towards Real Estate Ownership Can Mean The Difference Between Financial Freedom Or Homelessness

Its no big secret that every person who doesn’t have their own home wants one no matter how improbable it may seem according to their financial and social circumstances. For many people, being a home owner means that you can hold your head high against other people.

This thinking is so pervasive that in our society many people are judged according to their housing situation. There are actually people with their own homes who treat people who rent as second class citizens or beneath them.

Of course there is a bit of reality into this, not all people who rent are poor but there is a high proportion of renters who are actually poor. It also doesn’t help that renters are most often at the mercy of their landlords who may at times impose restrictions on their renting activities.

This must be the reason why house prices continue to rise on a yearly basis. Prices of many houses have risen to such extent that even downpayment for houses take years to be saved by even middle income people.

When I immigrated to Australia, it didn’t take me long to find a rental property of my own. I rented a two bedroom apartment at a relatively cheap suburb in Sydney. I reasoned that the rent was affordable and I could always rent out the extra room.

The next thing I did was treat my rental apartment like it was my own. I spent a good deal of money tidying up the place. I not only bought the basics like furnishings and appliances but I also spent money on decorations.

Since I like art, I spent money on a couple of paintings as well as statues and figurines. Not to mention that I filled a bookcase with books and bought many movie DVDs (they were still high tech technology then) and in no time, my apartment was cluttered.

I also bought plants and plenty of at least for me, unneeded cutlery and other kitchen machines and tools. For me, I had an apartment that has the furnishings of an average house in Sydney or other houses in the world to be exact.

In short, I was your average apartment and even house owner who thinks that I would spend the rest of my life living in my apartment or home. This was a big mistake. A mistake a lot of people make.

One of the first signs of renting trouble I began to notice is that frequent and high increases in rental fees in Sydney. I might have not known it before, but Australia and especially Sydney is becoming a big favorite of many immigrants.

The first few rental increases were bearable but the succeeding ones definitely dented my financial situation. I soon realized that my weekly rent was almost reaching half my weekly salary.

I considered renting my now vacant extra room just like what I did to tide me over during the early years of rental increases. But alas! No one wants to rent my extra room. I therefore realized that it was time to give up my apartment.

This is the first lesson I learned about renting: Your rent would eventually go up higher as times go by. You should consider a scenario where you are already retired from working and is financially dependent on a pension.
It would be a scary thought that you may not be able to afford the apartment you lived on for decades because the price of the rent has outstripped your retirement income. This could be the reason why there are many homeless people who are old and single.

To continue my story, I decided to now give up my now expensive rental apartment and look for a cheaper accommodation. I came to a decision that instead of renting a whole apartment, I would only rent a room on a house or an apartment.

Seeing all the possessions I have in my apartment, It dawned upon me the error of my thinking about buying possessions for one’s rental apartment. I easily realized that I had to empty my rental apartment of all my possessions before I move or face legal trouble.

To anyone who doesn’t know it yet, it takes a lot of money to move your possessions to your new accommodation. It also takes money to dispose of your possession. Either way, you have to spend good money.

Of course when you dispose of your possessions. You also dispose money. That is, the money you used to buy your possessions. So, the more possessions you bought, the more money you actually lose.

Of course, you can always try to recoup your money via a garage sale or an auction, but from my experience, you would hardly earn back less than 10% of the money you used to buy your possessions.

At least this was what I have assumed. But I forgot that unless I’m the landlord, I cannot dictate the terms of my accommodation. And what was this term or power of the landlord? The power to evict you and end your lease.

It happened to me twice. For some reason or another, my landlord had to end my lease and I have to look for another accommodation. As anyone who has experienced moving from one accommodation to another, moving is a big hassle.

First, you have to look at an alternative accommodation fast. Usually, most landlords time limit for giving you notice of eviction is only a couple of months. In my experiences, I was only given a month to look for new accommodation.

Then there’s the matter of actually scheduling a meeting with the landlord and scheduling a visit to the property in question. In my experiences, landlords are employees or business owners whose schedule is usually very tight. Scheduling a meeting is a hassle.

But I know that a lot of renters have experienced what I have experienced and this is the reason why they are so desperate to buy their own home. In hindsight, I should have taken seriously the thought of owning one’s own home.

I should have taken the example of my friend who I would call Miss Sensible. She is an acquaintance of mine and we sometimes talk about what’s going on in our lives. The first thing I noticed was how thrifty she was.

Her meals were basic and you could see from her appearance that she doesn’t spend a lot on it. Not that she’s ugly or out of fashion, rather, she wears modest clothes and affordable accessories.

I found out from her that she was living in a rented apartment and that she shares a room with one other woman. She doesn’t have a car and hardly goes out partying with her friends. She actually likes reading books.

I think you’re getting the picture: She’s a simple and thrifty person especially with her accommodation preferences. Your assumption is correct and this attitude of hers has allowed her to save money for a downpayment on her apartment.

But this is not the end of her story. According to her, it would be hard for her on her own to pay the monthly amortization on her newly owned apartment. So what did she do? She rented out her apartment to renters.

She rented out her extra room to two women and she shares her room with another woman renter. There is also a woman who rents her couch space. So all in all she has 4 renters who are actually paying for her apartment amortization each month.

Is what she’s doing illegal according to housing rules? From what I’ve read, housing rules in Australia at least, limits a room to two occupants only. So, she’s in the clear on the issue of renting out her room and her extra room.

As to the issue of renting out her couch as a sleeping space, I searched around online for such rules which bars the renting of your couch. So far I’ve found no such rules barring you from doing so.

I could imagine that her apartment would be a bit crowded especially since she shares her room with a renter but I also realize that her four renters are actually paying for her monthly amortization. If I were in her case, I would have done the same.

A couple of years later, I met Miss Sensible again. Apparently, she’s now in a relationship. I asked her if having renters in her apartment is causing trouble with her relationship. She smiled and told me that she has no such problems.

According to her, one of her big criteria in finding a partner is someone who owns their own house or apartment. It doesn’t matter to her if they are still paying for it, as long as they are not renting, it’s fine by her.

The good news is that her partner does own an apartment that he’s still paying for. She moved in with him and she now has five renters in her apartment. So, she’s not only got her monthly home amortization covered but also has extra money thanks to her 5th renter.

I recently came upon YouTube videos which showed the homelessness situation in America. I think a lot of people in other countries outside of America are wondering why there are so many people living in dirty tents in California on such a prosperous country and city.

I don’t know the answer because I know it’s a complex one. I also find it hard to believe that some of the homeless people I see live in expensive cars like Mercedes Benzes, BMWs and other luxury cars.

Then I viewed one such homeless single woman and her small daughter. Apparently, she was a highly paid executive who had an expensive apartment. She was living the high life. Buying an expensive luxury cars and always dining out and going on expensive holidays.

It did not occur to her that she could have used her high salary then to pay for her own home. Her rent got so high and at the same time she was fired from her job. Now, she and her daughter are homeless and sleep inside her expensive luxury car which is now old.

I realized that I was similar to her in some way. We took the idea of owning our own home lightly. We never realized how vulnerable a renter really is. I have since amended my ways and live a little comfortably. At least I know I won’t be homeless when I grow old.

A lot of people take for granted the value of owning their own home. They would rather spend their money on luxuries and other things rather than saving up for a home. This is the reason why a growing number of people are becoming homeless especially in old age.

A lot of these same people would say that houses have become unaffordable and they should just give up on owning one. But they forget to realize that the reason houses are so expensive is because this is how important they are to people.

If you would ask many old people during their time, they would tell you that houses were already expensive back in their days. Houses will remain expensive and would continue to be expensive because they are that important to people.

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