Knowing whether to buy or rent takes careful consideration. Both buying and renting has benefits but which is the choice that suits your life today and in the future?
Benefits of owning a home
It is a big step and taking on a home loan is quite a commitment. There are benefits:
Increased equity – Over time the value of your home may increase giving you an asset with equity. This equity is money that can be tapped into if you ever want to sell, renovate, buy another property or put towards something that’s important in your life.
Forced savings – Your mortgage payments may act as a type of forced savings, increasing what your assets are worth and borrowing power.
Stability – Owning a home is a long-term commitment that can give you a sense of stability in the suburb you’ve chosen to live.
Reap the rewards of renovating – Enjoy the flexibility to undertake renovations and create a home that suits your needs.
Disadvantages of owning a home
Repairs and Maintenance – Owning a home comes with a sense of pride but also with unexpected costs. Repairs and maintenance can be planned and budgeted for but every now and again something out of the ordinary may occur.Buying costs – When purchasing a home there are buying costs – Building and pest inspections, bank fees, stamp duty, lenders mortgage insurance and conveyancing or solicitor fees.
Ongoing costs – Along with your mortgage repayments there are council rates, water rates, insurance and, if relevant, body corporate fees.

Benefits of renting

If you’re renting a house, either for the short or long-term, you may have the benefit of saving more money while enjoying more flexibility.
Less money outgoing – As weekly rent is often less than mortgage repayments and ongoing costs so you could end up with more in your back-pocket week-to-week.
Live in a better area – Suburbs you love may be a little out of reach to buy but you may be able to snap up a rental in these high demand areas. If you’re renting you’ll be able to choose a house with the amenities that best suit your needs, all in a location you love.
Reduced maintenance costs – When renting the onus of maintenance is on the landlord.
Flexibility – You can try a suburb before you buy? You’ll enjoy more flexibility.

Disadvantages of renting

Rental money is often referred to as dead money as the amount you’re paying isn’t changing your financial position.
Less security – Everyone’s life changes, even your landlords. If your landlord decides to increase the rent, sell the house or move into the property themselves – your security and budget could be thrown out entirely.
Not your home – When you’re renting a house there’s certain rules that come with it. Painting the walls, hanging artwork, having pets and completing renovations are all at the discretion of the landlord. No matter that it is your home it is still someone else’s house.
Uncertain costs – As house values increase over time, the price of rent often does too. If you’re renting you’re not getting the positive impact of the property pricing shift but the expensive one, without financial gain.