Buying versus renting a property: We explore the options
The argument of renting versus buying a home has been around for decades – and most people will have their own opinions on the matter. If you are currently in the market for a new home, you may be wondering about whether buying or finding a property to rent is better. There are pros and cons to each of these options, however, and your decision will depend upon your current lifestyle needs and limitations.
Choosing to rent a property
Renting is a popular choice for young families and singles who have not yet settled on certain aspects of their life, such as their career, ideal living location, and future goals. It offers flexible accommodation that does not bog one down into a long-term investment and changing one’s mind on a dime is possible. Some of the benefits of finding a great property to rent include:
- Maintaining the home is much more affordable: Tenants have fewer financial concerns than landlords do. Landlords, for example, must cover things like repairs and maintenance, as well as homeowner’s insurance and certain rates and taxes.
- You have fewer responsibilities: For tenants who love to travel often, a smaller lock-up-and-go apartment is easy to leave for a few days. Moving to a new house also becomes much simpler, as it is not a tenant’s responsibility to find a new renter for the place.
- Better accommodation options: Renting affords tenants the option of living in better locations, which would normally be inaccessible if they were to buy a property there.
- Affordable rent helps one save: Rent is often significantly more affordable than paying off a monthly home loan. This allows tenants to save up for a home they wish to buy or invest in property in some way.
The disadvantage of renting, of course, is that there is no return on one’s investment or wealth creation, as you never own the home. You also have to live by the rules of your lease agreement and cannot make any changes to the home without express consent from the landlord. Additionally, there is no way to ensure that your lease will be renewed once it has expired, which may leave you unexpectedly without accommodation.
Choosing to buy a home
For many individuals and families, owning their own house is the ultimate goal. It means growth of personal wealth, building equity, and future security. It is a long-term investment that many people find exceptionally rewarding. Some of the advantages of owning a home are:
- You own an asset: No matter the economic climate, owning a property gives one much more peace of mind. Working towards paying it off quickly means you will make a return on it. As your home’s value appreciates over time, you can opt to resell it for a profit.
- You have more freedom: Your home belongs to you, which means you are not restricted by contractual rules and obligations and can decorate, overhaul, and renovate as you see fit.
- Rent your property out: You can find a tenant for your investment and use the rental income to cover your bond. Eventually, this may become a valuable income stream.
You will also improve your credit score when making monthly repayments. The downside to buying, however, is that returns on your investment are not always guaranteed, and it is a major financial responsibility with bond repayments and home maintenance. When renting out a residence, homeowners are also reliant on finding the right, long-term tenants, which involves a complicated vetting process.
Whether you are looking to rent or buy, we at Fine & Country South Africa can help you. With national, specialist knowledge of the luxury market, we will provide you with a seamless real estate agency experience and the very best set of services. To speak to our team today, contact us here.