Rent or Buy? Get the Right Advice; There Are Many Advantages and Disadvantages in the Property Market
FIRST National Real Estate's national communications manager, Stewart Bunn, says current market conditions, coupled with increasing housing affordability, is causing a rental dilemma. Many renters are questioning if now is the time to stretch their budgets and commit to buying their own home.
C[pounds sterling]With lowering interest rates and falling house prices, home buying is proving almost too attractive for many renters, but serious consideration needs to be given to the person's individual and financial situation to ensure they make the right decision,C[yen] Mr Bunn said.
C[pounds sterling]It may appear, on the surface, that purchasing a home may make more economic sense for those doing it tough, where the monthly mortgage is not too far off what they are currently paying for rent; but a closer look may reveal that incidental costs and a small change in circumstances could lead to an untenable situation.C[yen]
According to Mr Bunn, the advantages of each housing option should be weighed against the drawbacks to find the one that best suits individual needs and situation.
C[pounds sterling]Renting offers great flexibility, with the option to relocate from home to home and area to area as the need arises, which is not the case with buying a property,C[yen] Mr Bunn said.
C[pounds sterling]If finances get tight, or the home situation changes for any reason, it is far harder to just pack up and go if you own your own home.
C[pounds sterling]Renting is also often a cheaper alternative to buying Co especially in the inner-city areas particularly favoured by Gen Y-ers, who want an urban lifestyle close to where they work.C[yen]
While vacancy rates continue to be under pressure, the fact remains that renting may still be more affordable, with monthly rental payments usually less than a mortgage repayment for a comparable property and without the other incidental costs that can be incurred as a homeowner.
C[pounds sterling]One of the greatest financial and stress-free advantages of renting is that property maintenance costs, repairs, rates and building insurance bills are the responsibility of the landlord, not the renter,C[yen] Mr Bunn said.
Despite these many advantages of renting a property, there are some disadvantages that will make buying preferable, particularly in light of escalating monthly rentals. …