Renting vs Buying (should you rent or buy your own property?)
You suddenly find yourself caught between the choice of whether you should rent or buy your own property. Yes, this may be a huge decision, however don’t despair. We are here to provide you with information that will help you make an informed decision.
When figuring out whether one should buy or rent it all comes down to personal circumstances, finance, market condition and future plans. Furthermore this decision comes with time and financial commitments. To assist, we have provided both pros and cons of renting and buying.
Renting Pros:
– Flexibility
Renting a property allows more flexibility than owning a home. This is ideal for those who could be faced with sudden changes such as job relocation. Renting requires no long-term commitment from a tenant, and is the best option if you don’t intend on staying in one place for a long time.
– Free from financial responsibility
As a tenant you are not going to fall victim of any housing market related conditions. You will of course have to pay rent but you’re not tied into monthly repayments on a bigger loan and therefore cannot fall into negative equity.
– Moving out is easier for a tenant
Moving out is easier for a tenant than a home owner as there is no pressure of finding someone to take over the lease, or finding a buyer to purchase the property as this is the duty of the homeowner or landlord.
Renting Cons:
– Instability
You are living in a rented house on a temporary basis. Any infraction permits a landlord to remove you with a 30-day notice. Plus, he can kick you out if he wants to sell the property.
– Regulations
Many apartments will not allow for any renovations or major decorative changes to their units or houses, such as changing counter tops or painting the walls.
Buying Pros:
– Freedom
If you own your home you can do what you like to it (within the planning regulations). You can make it a home for your family or simply move in and carry on. You’ll also be in direct control of any problems with the property and won’t have to deal with agents or Landlords.
– You’re investing in your future
If you own your home and have a repayment mortgage, rather than interest only mortgage, you are investing in your future and creating a valuable asset. At the end of the term of the mortgage you will own the property outright.
– You can refinance your bond amount
You have the option to refinance your bond amount should you wish to withdraw a large amount of money to pay for major purchases.
Buying Cons:
– A home owner has less mobility
A home owner has less movement when it comes to being able to move home than a tenant who rents on a short-term basis. A tenant can leave a property after fulfilling the notice period, which is usually one month. However, a home owner is likely to be dependent on selling their home before being able to buy a new one, and therefore it might take longer to be able to move homes once the decision has been made to do so.
– Not making any profit through resale
A home owner runs the risk of not making any profit through resale. This is often caused by economic factors such as a recession or high interest rates, or simply through a particular location becoming less desirable.
– Huge financial responsibility
Being a home owner comes with huge financial responsibility including bond repayments and regular house maintenance.
We trust you will analyse the above information that we have provided in order to determine whether renting or buying is best for you. Good luck!
