Renting and buying are both great options, but which one is best for you?
Are you thinking about buying your first home? Ever thought that maybe the money you spend on rent could be going towards a property that you are in control of? While buying a home can be seen as ‘the dream’, before getting caught up in this vision you need to assess whether you can afford it, if you actually want to buy, and if it is the right step into the future for you.
It is important to know that you are buying your first home for the right reasons, and not just because of the pressures of society.
Buying property can be a fantastic life achievement. It can give you long term stability and is an asset to your future. However, there is also great value in renting, and should not be seen as ‘throwing away your money’. Paying rent gives you a place to live, and you don’t have to worry about all the extra payments that owning a property entails.
There are various aspects to consider when trying to decide whether buying or renting is the best fit for you. Here are just a few:
The pros of renting:
Renting gives you flexibility to move around – perhaps you’re not ready to settle down and live in the same suburb for an extended amount of time. Renting allows you to move around more freely.
Renting gives you more freedom with your money – there are other potential investments besides buying a house. Without a mortgage, renting enables you to invest your money elsewhere. You aren’t tied down to long term payments, and you don’t pay interest with rent, which allows for a more lenient budget.
There are no extra costs with renting – if you are thinking about buying, you must take into consideration that you will also have to pay for extra costs like council rates, extra taxes, and be able to afford to fix any maintenance issues.
The pros of buying:
Buying allows you to be fully in control of your property – you are free to renovate and decorate however you please, and you don’t need permission to have as many pets as you want!
Property prices can rise (capital gains) – there is potential to profit off your home if you sell at the right time
Buying gives you long term stability – once your home is paid off, it is yours. You eventually remove the expense of housing.
Buying your first home is not something to rush into, however is a great asset to consider. It is important to determine whether you are truly ready and able to be responsible for the cost and liability it entails.
It is also important to remember that there is nothing wrong with wanting to rent. Although you do not own your home, this gives you the freedom you may not have as a homeowner. Take the time to consider all options and determine whether renting or buying is right for you.