To buy or to rent? That's the question

There are great reasons to own a home, and great reasons to rent. Weigh up each to decide which is the right option for you at the moment.

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Home ownership isn’t everybody’s cup of tea, so don’t feel bad if you don’t want to own a home. Renting comes with freedom akin to flying naked, but on the flipside it doesn’t necessarily set you up financially down the track.

Equally, you aren’t old fashioned for wanting your own front door and your own garden, with all of your treasures displayed inside. Or you simply want your money to go into an investment rather than into a landlords’ pockets. However, like ownership of anything, there are responsibilities and risks you need to be aware of and not shut in a cupboard like a dead mouse.

Pros

Renting
  • Rental payments are often less than home loan payments especially if you're living with other people. 
  • Your rent covers property costs including council rates, property insurance and body corp fees.
  • Got a leaky tap? Not your problem – call your landlord to get it fixed.
  • Don’t like where you’re living? Just hand in your notice – no strings attached like having to sell or rent out your property.
Owning
  • The adrenalin rush you'll get having a successful offer on a home.
  • You won't be paying somebody else's mortgage anymore, plus pay off your loan by getting flatmates in.
  • Your property's value could grow over time, giving you options; you could go from being a tenant to a landlord.
  • You can make your house exactly how you want it, go crazy with colour - it's all yours!

Cons

Renting
  • Paying rent eats into your savings plan for a home deposit.
  • You’re at your landlord’s mercy on how well-maintained the property you’re renting is.                              
  • Rent hikes could happen anytime (with notice from your landlord), or the place you’re renting could go on the market and be sold.                         
  • Competition isn’t just about how much you can pay… you’ll also have to convince your landlord that you’re going to be a great tenant.
  • No matter how long you’re living in the property or how well you look after it… somebody else still owns it.
  • You're stuck with the décor, and will need to tidy up for inspections. 
Owning
  • You’ll need to seriously save for your deposit – aim for a minimum of 20%, though you could qualify for a low-deposit home loan.
  • You could end up paying hundreds of thousands of dollars in interest over the term of your home loan, so it’s in your best interest to pay it off as fast as possible.
  • There’s always a risk that interest rates will go up, adding more to your repayments
  • If something goes wrong it is your problem to fix.



This information is not intended as a complete guide, as it doesn’t consider your individual needs or financial situation. Trade Me accepts no responsibility or liability for any inaccuracies or omissions in the content. Always obtain independent legal advice before buying or selling property.

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