Rent or buy?
Whether to rent or buy is an age-old housing dilemma.
As a home owner you don’t have the restrictions that come with a landlord, while renting means you aren’t locked into a mortgage or particular property. Everyone’s situation is different, and Credit Union SA CEO, Grant Strawbridge, says there are pros and cons to consider before choosing an option that works best for you.
One of the biggest benefits of renting is your ability to pack up and move to a new place if you want to upsize, downsize or just don’t like the neighbours or area. Plenty of people opt to rent in a ritzy location that they happen to love but can’t yet afford to buy into.
One of the biggest hidden costs of home ownership can be ongoing maintenance, especially when a major appliance like a water heater, stove, or air conditioner suddenly stops working. Renters don’t need to worry about covering the replacement costs because it’s the landlord’s responsibility.
It can be a daunting task to save for a home deposit, but saving for a rental bond can be far easier and much more achievable, which often makes renting a more affordable and realistic option for people.
Lower insurance costs
Renters only need to worry about insuring their contents, leaving the home insurance up to the landlord, who also has to address additional costs like council rates and the emergency services levy.
Owning a home can offer a greater sense of security, because you aren’t at risk of having to move at the end of a rental agreement or facing a landlord that suddenly wants to sell. The stability of owning a home can also be far less disruptive for families, and becoming a part of the local community is easier when there is certainty of tenure.
King of the castle
Home ownership means you can unlock your inner renovator and paint, renovate, and landscape at any time without having to worry about breaching a rental agreement. Put hooks in the wall, hang some pictures, and add those personal touches that’ll turn your house into your home. Some landlord’s may be happy for you to make some changes to their property, but you’ll need to ask their permission first.
Build your wealth
Real estate offers an investment that may increase in value over the long-term, and normally at a rate greater than inflation. Before signing on the dotted line, consider flood-affected areas, local amenities, transport options and consider investing in a pre-purchase building inspection. You should also seek advice from a licenced financial adviser and/or your accountant to ensure that investing in property is the right strategy for you, based on your personal circumstances.
Making regular mortgage repayments is an ideal way of “forced savings”, because you put money towards your mortgage instead of spending it in other ways. That monthly or fortnightly payment is a step closer to home ownership, rather than lining the pocket of a landlord.
For information about how to do more with your money, visit our Member Experience Centre or call (08) 8202 7777.
INFORMATION YOU SHOULD KNOW
This article is intended as general information only and has been prepared without taking into account the personal financial situation, objectives or needs of the reader. Before acting on this information, you should consider its appropriateness, having regard to your objectives, financial situation and needs. You should always seek professional advice or assistance before making any financial decisions.