You’ve worked hard and saved enough cash to put down a deposit on your first home. However, now you’re faced with the ultimate housing question – should you continue renting or look to buy?
To be honest, there’s no simple answer. But to make your decision easier, we’ve looked at the pros and cons of each.
1. Stability vs. flexibility
While forking out for a house is a big commitment, stability can’t be overrated. Buying a home can give you a real sense of certainty, community, and home ownership pride.
But if you’re not ready to settle – for career or lifestyle reasons – renting can give you the flexibility you need. You’ll have greater freedom to relocate, study more, or get some travelling under your belt.
2. It’s a long game
It’s best to look at buying as a long-term investment. If you have the means to buy, property can be a sound investment to set you up for a financially stable future giving you more options later in life.
On the other hand, renting can free you up to invest your savings in more than one asset, such as a small business or a share portfolio.
3. If you love it, insure it
Whether you rent or own, it’s still important to be properly covered
. As a homeowner, you’ll need insurance for your home and its contents. But if you’re renting, you’ll usually only need insurance for your contents.
For a better idea of how much we’re talking about, check out our Contents Calculator
or Home Building Calculator
4. Understand the costs involved
Home ownership comes with its fair share of expenses – and not all of them are predictable. Contributing consistently into a contingency or emergency fund each month can ease the burden if unexpected costs arise. So, if interest rates jump up or the air conditioning packs in, you’ll be able to deal with it.
On the other hand, renting means you’ll know exactly how much you need to spend each month, without the worry of upkeep and repair costs. However, you’ll still need to be prepared for possible rental increases or moving and cleaning costs once the contract ends.
5. Take creative control
When you buy a home, it’s your castle. You generally don’t need permission to paint, renovate, decorate or landscape. And you get to decide which improvements will potentially add value to the property.
With renting you’re at the mercy of your landlord, which can limit your ability to personalise the space. Some rental agreements are so strict that you cannot hang a picture without prior consent from the landlord. Breaching a rental contract can be costly, so make sure you read the fine print and if in doubt get permission via the agent.
The best option for you
It’s safe to say, the case for renting or owning isn’t a simple one. While there are pros and cons to each, it’s about thinking strategically and doing what feels right for you.