Welcome, if you just have moved into new place!
Congratulation, if you just have started a new family – the newly marriage!
Proud of you, if you just have grown your family members!
We know that you might be looking for a very nice place to prosper your family life.
Here are some tips for you to decide if you should rent a house or own a house.
There are pros and cons to renting a property, just as there to owning a home. Both options have their own advantages and disadvantages, for example renting allows you more expendable money in the short term, while owning a house gives one the sense of security as it is considered a long-term investment.
Let’s look at all the pros and cons of renting and buying a home. This will help you make a well-informed decision of what will suit you, right now.
Advantages of buying a home
- Owning a home offers the long-term benefits of security,
equity and potential growth in personal wealth
- The value of a home will appreciate over time and if you decide to sell, you can earn a profit off the sale.
- When you buy a house it becomes your legal property, which allows you greater freedom in its use without restrictions often enforced by a Landlord.
- Being a Homeowner allows you creative control of your property. You can alter the property, including decor changes, landscaping and renovations, to suit your needs and your style.
- You have the option of buying to rent which enables a Homeowner to generate
income from renting out the property. This income can be put towards the home loan.
- Being a Homeowner who makes repayments on time can improve your credit history. To name a few, good credit history means lower interest rate and bigger loan you may obtain in future borrowings.
- You have the option to use your home as securities to borrow some money during urgent needs or to pay for major purchases.
Disadvantages of buying a home
- Being a Homeowner comes with huge financial responsibility including bond repayments and regular house maintenance.
- There are additional costs to homeownership and these usually include rates, taxes, insurance, and maintenance for which the Homeowner is responsible.
- A Homeowner runs the risk of not making any profit through resale. This is often caused by economic factors such as a recession or high interest rates, or simply through a particular location becoming less desirable.
- A Homeowner has less mobility when it comes to being able to move home than a Tenant who rents on a short-term basis. A Tenant can leave a property after fulfilling the notice period, which is usually one month. However, a Homeowner is likely to be dependent on selling their home before being able to buy a new one, and therefore it might take longer to be able to move homes once the decision has been made to do so.
Advantages of renting a home
- Renting a property allows more flexibility than owning a home. This is ideal for
those who could be faced
with sudden changes such as a job relocation. Renting requires no long-term commitment from a Tenant, and is the best option if you don’t intend on staying in one place for a long time.
- As a Tenant, there is the possibility of living in an area in which you could not afford to buy.
- Moving out is easier for a Tenant than a Homeowner as there is no stress of finding someone to take over the lease, or finding a Buyer to purchase the property as this is the responsibility of the Homeowner or Landlord.
- After paying rent, a Tenant may have additional money which they can use to invest elsewhere, whether it is saving towards buying a house or investing in the business, and need not worry about putting additional funds into a home loan.
Disadvantages of renting a home
- A Tenant is bound by the rules of the lease agreement, which can impact the freedom to use or renovate the property.
- You cannot make changes to a rented property without the consent of the Homeowner.
- Renting offers no wealth creation or return on investment since the property will never legally belong to the Tenant, and instead, the Tenant is paying towards the Homeowner’s home loan.
- When renting a property, you will have no control over annual rental fluctuations which are directly affected by inflation.
- There is no guarantee that a lease will be renewed when it expires.