Buying VS Renting

Buying VS Renting?

It would seem that there are advantages to both buying and renting a property. As always, the decision rests with the home occupier and whether he finds buying to be affordable or even viable, depending on his personal requirements and capabilities. Some situations may necessitate the arrangement of a rental as a temporary measure. Perhaps you’re a contract worker who will move around a lot and it would be impractical for you to invest in a home that you’ll never be able to accommodate or take care of on a long-term basis. Perhaps, due to financial restraints, now is the wrong time to enter the property owner’s market.
While circumstances may lead you to enter into a rental agreement it is prudent not to become involved in a so-called “rental spiral” where you will eventually become reluctant to break out of the rental market and invest in your own home. Owning a property is truly an investment that appreciates in value. Unfortunately, with salary increases, too many people are quick to buy a new car as opposed to setting that additional money aside for potential property investment. A vehicle’s value will depreciate rapidly but a home, provided that it’s well taken care of, will appreciate in value the longer you own it. With owning a home, you get to enjoy the benefit of decorating and painting it to suit your personal taste. You may design the dream garden that you’ve always wanted and enjoy maintaining that as part of the investment in your home.
Renting a home relieves you of that pleasure. As a lessee, you must abide by the owner’s rules and you are restricted by needing to ask permission to make even the slightest alterations to the property. However, the responsibility of the bond repayment rests with the owner of a property, for the duration of that bond agreement (usually 20 years – or until sale). And though the lessee of a property is still responsible for monthly rental payments, these are usually only bound by a lease agreement that lasts for a year, before the option to renew is considered. While an owner is responsible for paying the rates and taxes associated with a property, a lessee is only liable to pay for water and electricity costs in addition to the rent. However, a home owner may use his property as security for further financing while a lessee is unable to enjoy this benefit at all. While the tenants of a property are responsible for ensuring that the home is left in the same condition as when they initially moved in, the responsibility to undertake general maintenance and upkeep of the home resides solely with the owner. Naturally, he holds a vested interest in maintaining his property. If the tides are turning then investors and first-time buyers would be wise to jump onto the property bandwagon now. Investors are able to enjoy capitalising on new developments at highly competitive prices and first-time buyers will reap the rewards of reduced property prices enjoyed at the present lower interest rate. DISCLAIMER: The information contained in this article is the opinion of the Author and should not be taken as advice. The Author is NOT registered to give any type of Financial Advice and is not associated with a Bank or Finance Company. The information in this article has not been verified and may be inaccurate or incorrect.