Deciding Whether to Rent or Buy
Conventional wisdom has it that buying is generally a better decision than renting, and owning your own home has become an important goal for many people. However, there are actually benefits...
Conventional wisdom has it that buying is generally a better decision than renting, and owning your own home has become an important goal for many people. However, there are actually benefits to renting instead. If you’re currently pondering this important question, consider the following points:
- FLEXIBILITY
If you know you’re not going to be able to stay in one place for long or if you’re someone who likes to have more freedom, renting can be a great option because you can give a month’s notice and be on your way with no stress of having to sell your house.
As a buyer, you have a different sort of flexibility, in that you can do pretty much what you like with the property without having to get the consent of your landlord.
- COSTS
Renting may cost you less per month and you may well be able to afford a bigger house in a better area if you rent rather than buy. You also won’t have to pay rates and taxes.
Buying a house comes with lots of extra costs – remember you’re not just paying the monthly instalment and perhaps a deposit, you also have to pay transfer fees as well as bond registration fees. This tends to add up to around 8% of the property price which is not an insignificant amount.
- INVESTMENT POTENTIAL
Renting is of course not an investment, as your money simply goes into your landlord’s pocket. However, because there is less of an initial and monthly output, you may well have extra money to invest in other ways.
Buying is reassuring as you know that at the end of the bond term you will own your property outright. Generally you are able to sell property for a profit after a period of time, so you are potentially earning money. You may also be able to get an access bond which can be a useful way of saving money, which also reduces your interest.
- RESPONSIBILITY
When renting, you have limited responsibilities in terms of maintenance – if anything goes wrong, you just call the landlord and they are obliged to sort it out. This makes life easier on you and your wallet.
Buying means you’re responsible for anything that goes wrong, from a blown lightbulb to a leaking roof. This can be very stressful, especially if you are under financial pressure to make your bond repayments. At the same time, at least you are able to sort out any issues as quickly as possible, rather than having to wait around until it suits your landlord.
- FUTURE PLANS
Renting is generally a good option if you’re very unsure as t what the next few years hold. If there’s a possibility that you may change jobs, be transferred or have kids, buying a property that suits you now may be an expensive mistake if you have to sell in a couple of years.
Buying is a great option when you’re reasonably settled in your work and city and know you’ll be able to stay in one place for at least 5 -10 years.
At the end of the day, this is an emotional decision as much as a financial one, and only you can know what the right plan is for your circumstances. Whether you decide to buy or rent, there are ways to make your home your own and to live there happily for as long as you need to.
Writing blogs about the property market of South Africa.
Content Team - Real Estate Agent
