Which is really the better option: buying or renting? Well, the short answer is neither or both. Each is an advantageous decision given the varying circumstances. People often say that renting is generally the worse investment, but the data doesn’t always support that.
The real question should be: Which is better for you? Well, for that it depends. You really have to look at your situation and what you’ve got to work with. For example, ask yourself what do you need moving forward.
This doesn’t necessarily have to be your end-game or retirement plans. You need a place to stay right now, so this is the phase you’re in at that present time. There’s no minimum. It could look like eight years studying at Uni for example, or moving between jobs. In that time, you could make smart work of your money renting from place to place within the same area.
Also, consider your finances. But it’s less about what you have, and more about how you choose to spend your money.
Of course, buying will cost you more due to solicitor fees, Stamp Duty, maintenance, exit fees (when you do sell such as Real Estate agent charges and marketing), but if you know where you want to be and you can see yourself owning the house long term, or you can renovate and flip to make money in the short term then it can often be a smart decision. A smart decision can be also be based on strong capital growth, investment potential, and liveability.
Remember if you are only going to own a property for a short period (unless you are in a very high capital growth suburb or doing a flip project), then renting might be the better option. No large bills (other than bond-which you will get back- If you treat the property kindly), no maintenance/ gardener charges, council rates, etc.
Consider it in terms of buying security versus renting flexibility instead.
Many people nowadays especially in or close to the city decide to buy property a few km’s away from the CBD, or a slightly less expensive property but still with fantastic capital growth potential, to rent out. Their tenants pay their mortgage on that residence while they rent a property where they want to live. This can often cost less in rent than it would in mortgage repayments. It means you are still on the market, own a home but can afford to live exactly where you want to live. This is a great option as long as you don’t mind the limitations living in a rental can often have.
If you’re renting, look for deals that can make the most of a limited time frame. It is difficult in this market though as you may have to offer more money upfront or commit for a longer period due to the lack of properties available. Try to make your application look as clean and appealing as possible.
If you’re looking to buy, it is also a difficult time. One thing you can do is your research and compare the home loans available to you, (ask me about my fantastic mortgage broker contact) as this makes a bigger difference than most people realise.
Looking to get a roof over your head but are unsure about which factors are in your favour? We can help figure it out for you. We recommend both buying and renting properties, but only after we’ve considered your circumstances and determined which option is best suited to you. Book us for a consultation and let us help you try and figure out the best option for you.