What Is Property?
Property means things such as land and buildings. People can own property, live in it, rent it out or invest in it.
All kinds of property
Owning a home
Some people buy a home to live in, using money saved as a deposit and money borrowed through a mortgage.
🏠 Owning
You buy the property and it's yours, subject to any mortgage still owed.
🔑 Renting
A renter pays rent to the property owner in exchange for using the property.
Renting and owning are different arrangements — neither is automatically better. Different situations suit different people.
Property as an investment
Some people buy property as an investment rather than to live in. They may rent it to other people and receive rental income, and hope the property increases in value over time.
Property values can also fall. Owning property has costs too — maintenance, rates, insurance, interest if money was borrowed, and other costs.
Buying a $400,000 house
How much would they need to borrow?
$400,000 − $80,000 = $320,000.
What other costs might they need to think about?
Maintenance, insurance, rates, and mortgage interest — none of which are part of the purchase price itself.
Try to avoid presenting home ownership as the only measure of financial success. The goal here is helping your child understand one of the major assets and financial commitments they may encounter as adults.
Where to next
More on mortgages and unexpected expenses.