Wow, property prices are insane for you guys. I'm glad that I live in the good ol rural USA (Ohio).
I just bought my first property designed to rent out. It was $45,000 USD inside of a city of 13,000 people. It's 1400 square feet. It wasn't in perfect condition, but after everything was fixed, I've put about $3,000 into the house (plus a $3,300 down payment).
In my area, this house *should* rent out for around $650-$725/mo USD depending on conditions. I am preparing to buy quite a few more properties like this. There is a quad-plex (4 single family dwellings) in my area for $129,000 that I will buy once I get a re-finance on my house, which will rent out for around $550 per dwelling.
BTW, I'm 21, and the reason I can do this is that I live with my parents. My girlfriend and I make near minimum wage ($8.00/hr for me, and $7.93/hr for my girlfriend. I work 60hrs/wk, she works 25hrs/wk).
Ultimately, the issue with renting vs. buying is if you have a huge lot of money. My parents just bought the house we live in. Unfortunately, it's very very difficult maintaining the house, as they have to pay for a $1300 USD mortgage payment (including PMI and various taxes), plus utilities, plus everything else. They can barely afford it. There are MANY bankruptcies in the US, and Ohio due to people spending 50% or 60% of their entire paycheck on a house that's too big (American materialism at its best).
Realilistically, the best thing that you can do is buy a property and re-hab it if you can find cheap labor. On my house that my g/f and I bought, we're paying $400/mo plus the $6,500 it cost to buy + fix it up. That's very cheap for the great quality of the house. However, not everyone can do that. My brother is a real estate agent that takes care of many of the details of the house, and we pay him a % of the income from the house.
IMO, renting is far better than buying, as you KNOW what the house is going to cost you, if your at a mid or low-level income. If you are assured a big paycheck, buying a house is better if you can live within your means, and put a nice down payment on your property. Atleast that's the way it works in the United States at the moment.
Back from the dead, I'm afraid.
