When it comes to the question of whether one should buy or rent property, many factors come to mind. Both options have their own advantages and disadvantages. The answer to whether buying or renting is better largely depends on your personal profile and preference.
Most of us, at some point in our lives, will have to decide whether to buy or rent a home. The decision that is then made is often based on the financial factors involved over a long-term period. Factors that influence this decision can often include the individual’s personal financial circumstances – in other words, individuals decide to rent because they cannot afford to buy.
There are also other personal influencers like employment status and prospects, family composition, lifestyle preferences, hobbies and activities that play a role.
Purchasing your own home offers long-term benefits of security, equity and potential growth in personal wealth. As the value of your home increases over time, when you decide to sell, you can earn a profit off the sale.
Being a homeowner allows you creative control of your property. You can alter the property, including décor changes, landscaping and renovations, to suit your needs and your style.
You have the option of buying to rent which enables a homeowner to generate income from renting out the property. This income can be put towards the home loan. You have the option to refinance your bond amount should you wish to withdraw a large amount of money to pay for major purchases.
Renting a property allows for more flexibility than owning a home. This is ideal for those who could be faced with sudden changes such as a job relocation. There is the possibility of living in an area in which you could not afford to buy.
When renting property, moving out is easier as there is no stress of finding someone to take over the lease, or finding a buyer to purchase the property as this is the responsibility of the homeowner or landlord.
The only insurance required by a tenant will be to cover the contents of the home, while all maintenance work on the property is for the homeowner’s account, as is homeowners’ insurance.
There are additional costs to homeownership and these usually include rates, taxes, insurance, and maintenance for which the homeowner is responsible. Sometimes these costs are foreseen or unforeseen, so you will have to be careful.
A homeowner 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 location becoming less desirable.
When renting a property, as the tenant, you are bound by the rules of the lease agreement, which can impact the freedom to use or renovate the property. You cannot make changes to a rented property without the consent of the Homeowner.
Renting offers no wealth creation or return on investment since the property will never legally belong to the Tenant, and instead, the Tenant is paying towards the Homeowner’s home loan.
Buying a home rather than renting can be viewed as a better long-term investment. When choosing to buy or rent a home, one should look at all the financial factors involved over a long-term period for both a homeowner and a tenant.
At PropertyFox, we want to take the whole process out of your hands and make sure that the sale of your home goes as smoothly as possible. Contact us today and we will take it from there.A