Are you having trouble trying to decide on whether to rent a property or buy one, this can be frustrating to think about as there are positive sides to both arguments depending on your current circumstances. The following tips are given to try and help you in the decision making process. Answer the questions relating to them as objectively as possible and you will benefit yourself tremendously.
- The expenses you will be responsible for. When you rent a property the main expense you will be responsible for is paying your rent to the landlord on time. However when you buy a property you are not only responsible for paying the bond you are also responsible for the rates and taxes, levies and other charges relating to the maintenance of your property. Objectively assess exactly how many expenses you want to be responsible for and this will make your decision easier.
- How much of a commitment do you want to make to the property? When you receive a loan to purchase a home you are often bound to a 30 year commitment, financial and otherwise. You can’t just vacate the property at a moments notice by simply breaking your lease. The bank will hold you responsible for payment until the property is sold. When renting you are bound to what is usually a 12 month lease agreement and all you need to do is make sure you pay your rent pay on time. Decide on how much of a commitment you are ready for.
- What will your monthly payment be? Renting will almost invariably be cheaper than paying off a bond every month, but at the end of paying off the bond you will have a great asset instead of helping someone else pay off their bond by renting. Work out your finances carefully and see exactly what you can afford to pay.
- Creating personal wealth. Do you wish to increase your personal wealth and perhaps build a property portfolio that you can enjoy and leave to future generations? Or are you not concerned with building wealth and happy with your life as it is? Buying property has proven to be one of the soundest investments over the centuries, while renting gives you no investment advantage or growth in wealth over the long term. Decide what you want in the long term and start planning for it now.
Whatever decision you arrive at make sure you get the opinion of experts who are qualified to give you financial advice. Buying a property is a serious commitment but missing out on a potentially great investment because of poor advice is something most people will regret forever. Choose your advisers carefully.
What do our readers think? Is renting a property from someone else always a waste of money?