IN Rent vs Buy

 
"Rent or Buy – that is the question"


We’re hearing of reports about increased first home buyer activity  in the market again due to a shift in market conditions.


The median house price has no doubt fallen and remained relatively flat for a protracted period, providing a window of opportunity for renters wanting to move to property ownership.


Recent statistical data suggests that currently  there is little difference between monthly mortgage repayments and rental payments providing that much-needed incentive for first home buyers.


The October RP Data Buy vs Rent report found it was cheaper to pay a mortgage than it was to rent in 388 suburbs across the country, with 44 of those in Western Australia.


These statistics can be exciting news for people who’ve been renting but aspire to own their own property, and up until now haven’t been able to afford it. Initial purchase and ongoing affordability is the key issue in this consideration.


However, before you jump into a mortgage of your own there are a few important aspects to take into account.


The first, and the most important is knowing what stage of your life you’re at and what style of life you’re after.


Owning a home is both an investment and a lifestyle choice and comes with a certain amount of responsibilities. Home buyers must take into account their own personal situation and assess each and every aspect of home ownership because both renting and buying property has its perks.


For those thinking of buying for the first time remember to consider other costs such as capital gains if you are an investor plus stamp duty, finance establishment costs, statutory  outgoings plus strata title fees for apartments and villas.


There are other costs of home ownership such as upkeep and maintenance which all add to the cost of buying - as opposed to renting, where none of these costs are a direct issue.


The suggestion that buying is cheaper than renting is somewhat true but in reality not everyone wants to own a property.


Renting has its fair share of benefits and these include its limitations. Increasingly people are choosing renting as a long-term option and approaching renting with a different attitude , for example taking long-term lease periods and set rent reviews to provide security and certainty.


Not being tied down to a mortgage for say 25 years can be what makes renting so attractive because it can facilitate more flexible lifestyle choices which is what many people are after.


Putting all the data and academic debate to one side, it  is a choice between the heart and the mind, and the right choice is what suits the individual depending on their aspirations and life stage. Notwithstanding seeking the advice of an informed property professional can assist in making the right choices.