Is it better to buy or rent?
Category News
Depending on where you're living, what stage of life you're at and what your future plans are, renting a home or buying property may be the best option for you. Jawitz Properties unpacks the respective advantages and disadvantages of renting and buying.
The benefits of being a tenant
The positive sides of being a tenant centre around freedom and flexibility. If you're not sure where your work will take you next, or you're toying with the idea of moving to a different city or country within the next couple of years, then renting can be the right option for you. If you're just starting out and you're not quite ready to make a sizeable financial commitment, being a tenant may also be the answer. Similarly, if you've just moved to a new city and you're still exploring and finding your way around, it may be helpful to rent until you're sure which area and suburb you'd like to live in. Selling a property may take a long time, but if you're a tenant, you'll just have to give a month's notice at the end of your lease.
The downside of renting
On the flip side of these advantages is the fact that by being someone's tenant, you are contributing every month towards helping them pay off an asset. This means that you are helping someone invest in their future, rather than investing in your own future.
As a tenant, if you rent one property for longer than a year, you're likely to face rental increases, meaning that your home will cost you a little more every year. You'll also need to live within a set of restrictions based on the fact that your home is someone else's property. You'll likely need to get permission if you wanted to repaint the property or hang pictures. Making more significant changes to the property to have it better suit your family's needs is likely to be out of the question.
Positive points about property ownership
From a financial and future-planning perspective, the biggest reason to buy property rather than rent is that you will be investing in an asset that will be worth more by the time you have paid it off. This means that you are investing in your family's future. The equity that builds up in your property can later be used to invest in another property, pay for your child's education or help to finance your retirement.
You will also avoid drastic changes to your cost of living, because the impact of interest rate changes is likely to be less than that of annual rent increases. There is also a wonderful feeling of permanence that comes with owning your own home and knowing that you aren't going to be packing up in a year when your lease comes to an end.
Potential challenges of homeownership
Owning your home comes with a set of expenses that tenants don't face. When something breaks, it will be your responsibility to pay for repairs, and you'll also need to pay monthly costs for various types of insurance. Over and above this, when you buy your home, you may need to put down a deposit and if your new home costs more than R1 000 000, you'll also need to pay transfer duties.
In a nutshell, buying property is a more financially sound decision for the long term, while renting provides convenience for those looking for a place to call home for the short term. If you're looking for help to find the right property to buy or rent, property finance calculators or general information about the property market, Jawitz Properties is here to help. Contact us today.
Author: Jawitz Properties
