There are pros and cons to renting a property, just as there are to owning a home. Both options have their own advantages and disadvantages, for example renting allows you more spendable money in the short term, while owning a house gives one the sense of security as it is considered a long-term investment. Let’s look at all the pros and cons to help you make a well-informed decision of what will suit you.
Advantages of Buying A Property
– Owning a property offers the long-term benefits of security, equity and potential growth in personal wealth
– The value of a property will appreciate over time and if you decide to sell, you can earn a profit off the sale.
– When you buy a property it becomes your legal property, which allows you greater freedom in its use without restrictions often enforced by a Landlord.
– Being a property owner allows you creative control of your property. You can alter the property, including décor changes, landscaping and renovations, to suit your needs and your style.
– You have the option of buying to rent which enables a property owner to generate income from renting out the property. This income can be put towards the home loan.
– Being a Property owner not only will you have a large investment to your name, but paying your monthly bond repayments on time increases your credit score.
Disadvantages of Buying A Home
– Being a Property owner comes with huge financial responsibility especially regular maintenance except its land as land needs no maintenance.
– A property owner runs the risk of not making any profit through resale. This is often caused by economic factors such as a recession or insecurity rates, or simply through a particular location becoming less desirable.
– A property owner has less mobility when it comes to being able to move than a tenant who rents on a short-term basis. A tenant can leave a property after fulfilling the notice period, which is usually one month. However, a property owner is likely to be dependent on selling their property before being able to buy a new one, and therefore it might take longer to be able to move the property once the decision has been made to do so.
Advantages of Renting A Home
– Renting a property allows more flexibility than owning one. This is ideal for those who could be faced with sudden changes such as job relocation. Renting requires no long-term commitment from a tenant, and is the best option if you don’t intend on staying in one place for a long time.
– As a tenant, there is the possibility of living in an area in which you could not afford to buy.
– Moving out is easier for a tenant than a property owner as there is no stress of finding someone to take over the lease, or finding a buyer to purchase the property as this is the responsibility of the Landlord.
– After paying rent, a tenant may have additional money which they can use to invest elsewhere, whether it is saving towards buying a house or investing in other things.
Disadvantages of Renting A Home
– A tenant is bound by the rules of the lease agreement, which can impact the freedom to use or renovate the property.
– You cannot make changes to a rented property without the consent of the owner.
– When renting, you will often have to deal with a caretaker who will then be the liaison between you and the property owner. This can result in issues taking longer to resolve since there is a 3rd party involved.
– Renting offers no wealth creation or return on investment since the property will never legally belong to the tenant, and instead, the tenant is paying to enrich the owner.
– When renting a property, you will have no control over annual rental fluctuations which are directly affected by inflation.
– There is no guarantee that a lease will be renewed when it expires.
If you have decided to be a property owner, we can help you. Kindly check out our different garden schemes, they are affordable and we have flexible payment plans.