Deciding whether or not you want to buy property or rent is a very difficult decision to make as there a number of different factors that need to be taken into consideration based on your long-term life plans, your working situation and relationship status.
Here are a list of pros and cons associated with renting and the pros and cons associated with buying a property.
The Pros of Renting
Flexibility – Many people often refer to rent money as dead money however that is not always the case. The flexibility associated with renting means that there are less upfront costs thus giving an individual the freedom to make it easier for them to change their career or to move interstate to live and work in a new job.
No Upkeep – Generally speaking your landlord will pay the bills for any maintenance, rates and body corporate associated with the property you are renting. This means that you will have more time and more money to spend on other hobbies, investments or lifestyle choices.
Access to Better Locations – It is usually less expensive to rent in areas where you might not be able to afford purchasing property in. This means that if you love the place that you live in renting might be the best choice for you.
More Money Saved to Spend Elsewhere – Generally speaking rent costs less than a mortgage. This means that you will have more money left over from your income to spend elsewhere.
The Cons of Renting
The Lack of Freedom to Renovate or Decorate – One of the most restrictive things about renting out a property means that you will be unable to decorate or renovate it.
Less Security – Renting might not be the best option for you if you are in a situation where you are looking for a place to settle down for the long term.
You Will Never Own The Property – Ultimately by renting a property you will never own it and you are paying off someone else’s mortgage as opposed to generating equity in your own property asset that you could own.
The Pros of Buying Property
More Freedom – You obtain a huge amount of freedom when you buy property because you can redecorate, redesign and renovate your property so it can evolve and change in whatever way you want it to.
More Security – Owning a home will give you a huge amount of emotional security as you will know that you are there to stay for the long term and this can give you huge amounts of peace of mind as it gives you the capacity to plan for your long-term future.
Your Property Will Most Likely Increase in Value – Generally speaking property in most cases in value as time passes by. This means that as you pay off more of your mortgage you will grow the amount of equity in your home, this can be used to pay for things such as your children’s education or to buy an investment property or a new car.
The Cons of Buying Property
Huge Upfront Costs – The biggest downside associated with owning a home is the huge upfront cost involved. This means in most cases a deposit which is usually 20 percent, legal costs, conveyancing costs and stamp duty.
Ongoing Costs - The ongoing costs associated with home ownership are extremely expensive. This includes interest repayments, body corporates, bank fees, rates, repair and maintenance costs and so on.
Less Flexibility – When comparing owning a property to renting, home ownership has less flexibility because home ownership is more of a long-term investment that locks you in for the long-term future.
By taking note of all the information mentioned above it is evident that there is a lot that needs to be taken into consideration when deciding whether renting a property or buying a property is the best option for you to take in regards to your lifestyle choices and working situation.