When considering where you want to live, you’ll be faced with two options. Do I want to own or do I want to rent? To answer this question, you’ll need to think long and hard about your individual needs and requirements and you’ll need to consider your current lifestyle. There are advantages and disadvantages to each option, but you wont know which is right for you unless you weigh them out.
Advantages to Owning Property
There are many advantages to owning property. The biggest one is that you have security in your home, meaning no landlord can raise the rent or decide to kick you out. You also have the freedom to renovate as you like. In addition, you have an investment that you can cash in if and when the value of your property increases, giving you the possibility of a return.
Disadvantages to Owning Property
With the idea that you can potentially gain a great return on your property investment, you can also lose a fair bit of money on your investment if you need to sell when houses are selling cheap. In addition, you may end up spending more overall on interest payments on a mortgage, which can be more costly than monthly rent. People don’t always consider the hidden costs of home ownership such as maintenance and renovations, council rates and insurance. Finally, owning over renting means that not only your money is stuck in one place, but you might be, as well. You have less flexibility to travel for work or live in a neighborhood of your choosing.
Advantages to Renting Property
Renting has plenty of advantages such as providing the renter to live in a neighborhood that is more desirable and convenient than living where you can afford to buy, such as inner-urban areas. In addition, you get the benefit of being able to have less of a commitment in case you want to move to a new neighborhood or city. Many jobs in this day and age call for those who have the ability to travel, so having the flexibility to leave your leased apartment or house is a big gain.
In addition, renting means that you can invest your savings in other endeavors and earn on those instead, which could give you a bigger return than your property could.
Disadvantages to Renting Property
The skyrocketing costs of renting are making finding affordable and flexible housing more and more difficult for the average Australian. In addition, the amount you pay per month to simply borrow an asset instead of owning it outright in the end might not be worth it for some people. In addition, some renters find it more difficult to contribute to a savings account than those who have to put aside forced savings for a mortgage. Renters find themselves more tempted to spend any spare cash after paying their rent check.