The discussion around the benefits of owning a property versus renting always revolves around homeownership being the best choice. While owning a home has a number of benefits, it is also a huge responsibility. Conversely, renting alleviates many of the stresses of owning a home, but at the same time, you can throw away a good portion of your income by leasing property.
Australians are also weighing in on the benefits of homeownership, as house and land packages in Sydney and other places in the country have somewhat slowed down. Ironically, today more than at any other time, Australians have so much information within reach but choose to rent instead. There are a number of pros and cons of renting and buying.
Let’s take a closer look at the benefits of renting or buying so that you can make the right choice for your future.
Benefits Of Renting Or Buying
The central benefit of renting a home or an apartment is that much of the maintenance related to managing a home is included in the lease. Costs for repairs, landscaping, and other tasks related to maintaining the rental are taken care of by the management company. You also reduce the amount of money allocated to making sure the home is safe, namely insurance. When the market is a renter’s market, you can find yourself in some pretty nice neighbourhoods renting a place for a comparable price without the responsibilities that go along with owning a home.
Buying a home, while a great responsibility, presents homeowners with the chance to cash in on the many financial benefits. Homeownership is one of the most important investments a person can make because not only have you invested in a place to live, but homes are also the only material possession that appreciates the longer they are used. In essence, you can increase your net value as the value of your home appreciates.
Another benefit to owning a home is the fact that in more cases than not your monthly rate decreases when you take on a mortgage. Many find owning a home a much cheaper alternative to renting a place. Ultimately, when you have paid off the mortgage, you don’t have to worry about paying a monthly bill anymore. Because your home is now your own, you can renovate and design to your taste, and in some cases, renovations can increase the value of your home.
Disadvantages Of Renting And Buying
The obvious disadvantage of renting a home is that you can end up spending large amounts of cash every month, especially if you live in the city where rents are typically high. Furthermore, renters are at the mercy of their landlords where rental rates are concerned and might end up spending increasingly more than if taking out a mortgage. If renting, there is little stability because, at any moment, your landlords might decide to sell the place, leaving you looking for a place to live.
There are very few disadvantages to homeownership, one being the amount needed at closing. Closing costs and your deposit can take quite a bit of time to save, and add in the various registrations needed as a part of the home-buying process and it can make buying a home difficult. Finally, homeowners are required to have property insurance, which is another added cost. To say owning a home is an investment is an understatement.
Renting Versus Buying
Not that one is better than the other, but depending on your personal objectives, one might be more appropriate than another. For those who are single, young, and at the beginning of their careers, renting a place might suit their lifestyle needs and budget. Later on in their lives, as the responsibilities of home and family come to the forefront, you might find that homeownership is a more affordable option for your finances and your family.