Buying or renting: which is better for you?
In the market for a new home but need help deciding between buying and renting? Finding a first home is a life-changing decision for many people at the beginning of the year. Buying or renting a home is a significant decision, even if you have the means to do so.
Whether you're looking to buy a house for the long haul or you'd rather pay rent monthly, there are options. Every option has its advantages and disadvantages. To help you get through these tough choices, we've laid out the benefits and drawbacks for you.
Buying pros:
When you buy, you can do whatever you want with your property. One of the most appealing aspects of purchasing a property is the chance to build equity and have ownership.
- Long-term investment
The purchase of real estate represents not just an investment for the future but also an accumulation of wealth, provided that the property's value increases over time.
- House value appreciate
You can profit from an increase in value. Your property's value will rise over time based on the state of the market and how well you take care of it.
- More independence and privacy
Buying a home is better than renting since you'll have more independence and privacy. If you're renting, you'll have to deal with the noise of your neighbours. You gain more peace of mind and freedom to improve your place without consulting anyone.
- Increase your equity with each payment
Each monthly payment contributes to your equity when you own a mortgage-financed property instead of paying rent which builds equity for your landlord.
Buying cons
- No flexibility
When you buy a property, you don't have as much freedom because you can't quickly relocate someone when you want to, unlike when you rent. Moving can be costly since you must first sell your home.
- Increasing costs burden you as an owner
As a buyer, you have additional duties that a tenant does not. You'll have to foot the bill for monthly mortgage payments, homeowners' building insurance, and other costs associated with ownership. Also, it's possible (but unlikely) that your home's worth may drop over time.
Renting pros:
If you need a solution quickly but don't want to spend much money, renting can be the way. In this section, we will cover the perks of renting.
- The convenience of moving around
You get a lot of freedom, and renting is the way to go because you can up and leave anytime you choose. The convenience of leaving a property whenever one pleases is a significant benefit of renting as opposed to owning where one must first list the property for sale which might take many months.
Tenants have less responsibility for repairs or upkeep
If you rent, your landlord will handle most of the maintenance and repairs, so you won't have to worry about keeping your fitted or integrated appliances up to date. As part of standard maintenance, the landlord may also have to touch up paint, replace windows, and tighten knobs in some places.
Cheaper than buying
Renting a house is often a more economical option than buying. Furthermore, obtaining one requires far less red tape. One of the benefits of renting is that your monthly outlay is sure to stay the same, give or take a lease rise; this is in stark contrast to owning where you must also account for property taxes.
Renting cons
- There is no monetary benefit for you
You get no tax breaks and equity. There is no increase in property value. While renting offers perks, renting is not the same as owning a home. Only property ownership provides you with the full benefits of belonging to a community.
- Can't make renovations
The landlord's consent is required for any modifications, no matter how little, and the landlord will likely be footing the bill. You're very much stuck with the aesthetics of your home regardless of how you feel about them.
When you look at the big picture, buying is a way to secure your financial future. It may be a hassle at first, but it will become a big investment in the long run, instead of renting, where a big chunk of your money goes straight to the landlord every month. If you don't plan on staying in one place for the foreseeable future, renting is typically a better option than owning.
If you're interested in buying and renting property, Tshenolo Properties has expert property practitioners waiting to help make your next move. Get in touch with us.
