When you consider your future in property, it can be a bit daunting to try and decide whether you should buy or rent. Of course, there are different reasons why people choose to do either – mostly dependent on the level of finances you have at your disposal at any one time, but there are other factors to consider as well, and this article will look at the pros and cons of renting versus buying to help you make the right choice for you.
So, renting. This is where most people start out, unless you’re incredibly lucky and manage to save up tons of money prior to moving out of your parents’ (or other) home and secure a mortgage – or perhaps get left some property in someone’s will. Renting can be incredibly beneficial for a number of reasons – first off, if anything goes wrong with the property, it’s not your problem, it’s the landlord’s – you don’t have to do anything, unless you have a lazy, do-nothing landlord (and some people do) where it’s like pulling teeth to get them to do anything. The bottom line is though, you shouldn’t have to foot the bill for any repairs or upgrades that occur in the property while you’re there.
Additionally you should only be responsible for certain aspects of maintenance in regard to the property such as snow shovelling certain areas or lawn care. The added benefit to renting is that you will not usually be liable for things such as property tax or added fees (and sometimes rents even cover your utilities!).
Finally you usually have a contract that lasts 3, 6 or 12 months (sometimes different lengths, depending on landlord), which mean you’re only liable to stay in the property and pay rent for that period of time, allowing you flexibility to move around or go travelling and the like. The downside to renting though is that you don’t have the one hundred percent stability that comes with owning – meaning that if a development opportunity comes along for the landlord to develop the property into condominiums or other, you might be amicably kicked out, unless you want to purchase from the landlord.
Of course buying is what many people want to do. It provides more security and you can do what you like (within reason) to the property in terms of decorating, extensions, installing swimming pools, yard layout and landscaping and the list goes on. Additionally it means that you will always have some level of equity to fall back on, along with the opportunity to do things such as fix up your basement or attic (or even build a small guest house in the garden if it’s big enough) and rent it out for extra cash.
You can even rent your whole home out if you decided to go travelling so that someone else is, in essence, paying the mortgage while you’re gone. Perfect, right? Well sadly there are some serious costs associated with owning – and I don’t mean just the cost of the house. Closing costs, inspector fees, surveying, lawyer fees etc are just a few of the costs you need to factor into a purchase. After those, then you have recurring fees as well such as home owner’s insurance, property taxes and the like,which can be quite high depending on the location and city, and then – if you have any issues such as a broken water tank that you’re responsible for.
The costs associated with your own home can be high, but it can also be incredibly rewarding and worth it later in life when you downsize, sell and have paid off that mortgage! If you’re looking to buy, especially if you’re interested in purchasing property in Australia, you should check out the houses for sale in Illawara, a fantastic community in Australia that is desirable by many!
So there you have the pros and cons of both renting and buying and what each entails. Hopefully this will help you make the best decision for you when you come to move into your next property!