Your home is likely to be the biggest and most expensive purchase you will make in your lifetime and you should view it as an investment opportunity. At the moment it is still very much a buyer’s market on the property scene. Many people believe that it is a waste of money to pay off someone else’s mortgage but may be scared to invest in property.
Should I Rent?
Renting a property is generally less expensive than buying a property and is often less work as well. When you rent, you are generally not expected to pay for large repairs, etc. You are also not responsible for property taxes and rates. There are definite advantages to renting – especially if you are not sure what are you want to buy in. If you want to be able to pick up and leave, it is usually a lot easier to do so if you are renting than if you have bought a property. You will also find that you are more likely to find a property that is bigger than one you would be able to buy.
Add to this the savings in terms of instalment, taxes, etc. and you will find that renting works out much less expensive on a day to day basis. The main disadvantage when it comes to renting is that, at the end of the day, you will not own your home. This will lead to restrictions in terms of how you are able to decorate the place and there is always the chance that the owner will decide to sell the property or not renew your lease.
Should I Buy?
Of course, in the long run, buying a property is an investment. The reason that purchasing works out more expensive on a month to month basis is that you are also paying interest off in addition to your instalment. In fact, for the first two to three years, you are really only paying off the interest on your bond. A way to combat this is to pay as much extra into your bond as possible. The big advantage of buying a property is that you are buying a fixed asset and this should, if chosen properly, appreciate in value over time.
Purchasing property should be considered a long-term investment and chosen carefully as such. At the end of the day deciding to buy or rent can be a difficult decision to make as each has its own pros and cons. It is a decision that needs to be carefully considered before finalising it.