Buying or renting? It’s an age-old debate. People typically view rent as ‘dead money’, as opposed to the cash invested in buying property. But with house prices still at an all-time high in many parts of the country, the answer to this question might not be as straightforward as it was a few years ago.
The bottom line is, there are pros to both options. So, before you choose one side or the other, take the necessary time to understand how these relate to your needs and long-term goals.
Pros of buying
—The final payment gets closer
The first and foremost reason why people choose to buy property is to have a place to call their own, and every mortgage payment gets you one step closer to this goal.
—You can turn your house into profit
Whether it’s the house you live in or an investment property, you can always turn your home into a source of income. If you want to create an income immediately, you can rent it out, partially or wholly; you can also take in short-term renters, via AirBnb for example. And of course, you can sell it, hopefully at a profit.
—A sense of security and belonging
It’s nice to have the security of a roof over our head, especially – but not exclusively – for families with kids. You may also start to feel a sense of belonging and community, as you’re likely to stay in your home for longer than if you were renting.
—You can be more creative
Suppose you want to repaint, decorate or remodel your house: homeownership allow you to make every upgrade and improvement you wish. Plus, you don’t have to worry about ‘no pets allowed’ restrictions: your house, your rules.
Pros of renting
—Having more cash available
Monthly rent payments are usually cheaper than mortgage payments. So, by renting, you’d likely have more funds available to invest elsewhere – for example, in your own business or another form of investment.
Renting doesn’t entail a long-term commitment. If a sudden change occurs, such as a job relocation, you can easily and quickly move out, without going through the lengthy process of finding someone to take over the lease.
—More freedom to choose the right location
The rental market doesn’t fluctuate as much as the homeownership market. Regardless of the rising costs of renting, the cost of getting on the rental ladder is substantially cheaper than buying a property. In other words, you may still find a place to rent in suburbs that have become unaffordable to buy. But of course, it would be smart to balance this flexibility with an alternate wealth development strategy.
—Maintenance is not your concern
All home maintenance and upkeep costs usually fall on your landlord to handle. Knowing that you’re not responsible for maintaining the appliances, repairs and physical appearance of the house is one of the pros of renting.
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