Is It Better to Buy or Rent a House?
Buying versus renting has been a longstanding debate that remains to be unanswered. Both options boast of benefits and disadvantages, but weighing them on the same scale has caused confusion to many property seekers. To give you a better perspective, we’ve made an in-depth look at both cases, from the good and the bad, so you can clearly see which one suits your needs.
Buying a house
There’s a sense of pride and joy when you walk through the door of your own home. And, unlike renters, you are in full control. Everything in this property reflects you: your choice of interiors, the type of furniture, the range of appliances, down to the colour of the carpet. It’s a thrilling new beginning, especially that Australia aids first-time homeowners when it comes to purchasing their homes.
But other than its emotional attachment is its financial benefits. Your property is also an investment. Should you choose to move in the future, you will reap the efforts you have invested in your home. Go ahead – get your garden landscaped or install a granny house. You don’t need to ask permission from the landlord – but you do need one from the community, especially if it’s a major overhaul.
What’s keeping you from buying?
Like a leap of faith, buying a home comes with many risks. One of its many obvious threats: money. Here is where you shoulder everything: the mortgage, the loans, the cost of home extension – should you need it in the future. That’s not all; there’s home insurance, water fees, taxes, and community bills you need to take care of!
And be careful – not paying debts on time puts your credit score at risk. You should also take time to listen to the property market trends; buying a lot in a neighbourhood that’s decreasing in value doesn’t sound like a good investment.
Having your own home comes with security, but it will also make you feel locked in. For a long stretch of time, your property becomes a financial drain and a structure to keep in order. You handle the repairs. You are responsible for the fix-ups. Presently, if you are someone on the move, this may be something you don’t need – yet.
Renting a house
You may have been warned that “rent money is dead money,” but if you look at it closely, rent money may mean more savings and options for you.
Surprisingly, Australia’s homeownership has been on a decline since 2016. The reason: the desire for freedom. One great chunk of today’s homeowner demographic is in their 20s who are bound to spend time travelling and exploring prospects. Putting down roots, at this time, seems to be out of the question. And this is where renting seems to fit their adventurous lifestyle.
Renting gives you a lot of freedom. When your lease period ends, you can move to another place. You don’t have to endure living in one property for a long time, especially if you don’t like the cost or location.
Plus, you can also skip the financial stress – renting is less of a headache. Instead of carrying the entire deposit of buying your first home, you can divide your expenses with your partner or flatmate. The best part? Home repairs and property tax are shouldered by the property owner unless they share it with you.
What’s keeping you from renting?
You may have more money in your pocket, but you have less control over the property. Love decorating? You may be pinning for a built in furniture, a feature wall, or a water fountain, but first, you have to consult it with the property manager. Since it’s not yours, you cannot alter the house the way you want to. The best you can do is to install temporary furniture that will not damage the property as consideration to the next leasers.
It helps to know that the property market changes on a regular. You might have avoided paying deposits, but property managers can change the rent amount once a lease season ends. Should an issue arise, they can also force renters out. Thus, this means less security for you.
And, as we know it, renting never stops. It is a perpetual payment for something you can never own.
Which is which? A conclusion
Here’s the truth: there’s no one-size-fits-all solution for property seekers. Whether you’re in it for the long haul or just for the time being, you want a roof over your head where you feel safe and thrive in privacy. The real answer, therefore, depends on your needs, and your ability to finance whichever option you choose.
If you’re looking for a place to grow and make memories, it’s time to save up to purchase a home. If you’re still exploring possibilities in life and career, enjoy the experience of renting. Listen to the market, and make use of this knowledge as you make a purchasing decision that will better your life.
Kym Wallis, the founding director of Higher Ranking has over 15 years of advertising sales, digital strategy, and business development experience. He is currently working as Digital Adviser for Vergola.