The Pros And Cons Of Renting Vs. Buying In Australia
The debate of whether to rent or buy has always been a lively one, and as the average cost of a house is currently so high, it is still a hotly debated topic today. There are advantages and disadvantages to both renting and buying, but with all the misinformation out there it can be difficult to determine which path is right for you. To give you all of the information we have laid out the main pros and cons of renting and buying below.
RENTING VS BUYING
The main and most obvious pro of renting is that it is inexpensive to start compared to buying. While buying a home can be a pricey experience, renting usually requires quite a low investment to get started. The beauty of renting is that you don’t acquire debt, and aren’t locked in to the commitment for any long stretch of time. As soon as the lease is over you can leave without having to find a buyer or pay any extra.
While renting is cheaper in the short term, the downside is that you don’t get anything concrete for what you are paying. As you pay off your house, you are gradually owning a larger portion of it over time. When you rent you have no ownership over the home, and may in fact be forced to leave or have your rent increased at inopportune times.
Constantly paying rent will also drastically reduce your ability to save, meaning that it could take you a much longer time to be able to afford buying.
Buying comes with much more control and stability than renting does. When you buy you get fixed loans so that you know exactly what you will be paying in terms of mortgage repayments. Even while you are still paying off your house it is essentially under your control. You can feel free to make any major or minor changes you desire.
It is also, of course, a giant financial asset to own property or a home. Buying a home means that you can either sell it later down the line, potentially drawing in a large profit, or use your equity to invest in other properties and add to your portfolio.
The clearest con that comes with buying your own home is that it will very likely set you back financially and lock you in to a lengthy commitment with your lender. When payments are missed that can result in debt, putting you at financial risk. There is also the risk that your home will not increase in value, meaning that if you do decide to sell, it will be at a loss.
Overall the main differences between renting and buying is flexibility and stability. If you’re currently looking for something flexible that can adapt with you, renting may be your best option. If you want your payments to result in equity and eventually ownership, buying is for you.
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