Renting or Buying?
While there
are circumstances under which renting may be more advantageous than owning
the place where you live, over the longer term owning your own property is
without doubt the smarter option:
Peace of
mind - Firstly, you won’t have a landlord
dictating to you or inconveniencing you by giving notice to vacate or
sending prospective buyers to view the property. In your own property you
can live undisturbed for as long as you like and until you decide
when to sell and move on. Or you could make alterations to suit a changing
lifestyle.
Easier on
your budget - With your own property your bond
repayments remain the same apart from interest fluctuations. After a few
years your income will have increased and your bond repayments will make
less of an impact on your budget. If you rent your rental escalates each
year and will always be a major factor in your budget. For example, if your
rental is R3 500 today and escalates by 10% each year you would pay double
that (yes R7 000) in eight years’ time! Yet you would have nothing to show
for it.
Increased
flexibility - If you rent you may never skip a
payment. If for some unforeseen reason you cannot meet the rental payment it
remains legally due even if you move out. In fact, you may be liable for the
rental for the unexpired period of the lease. With a bond you may be allowed
to skip a payment now and again such as some banks are advertising now. You
may also negotiate a lower payment.
Creating
wealth - Property prices have been increasing
at double digit percentages for many years now. Someone who had bought a
property for say R300 000 five years ago can now sell it for R500 000 or
more. Although the current economic climate will cause a slow-down, property
prices will continue to rise for at least two reasons: There is only so much
available land and the increasing demand due to the increasing portion of
the population able to buy property will inevitably push up prices.
Secondly, the cost of building is increasing continuously, elevating along
with it the prices of established real estate.
You are
worth more - As a property owner you will
enjoy an enhanced wealth status. It will contribute to your ability to
obtain finance and can be pledged as security for a loan. Once paid off it
can be your nest-egg for retirement or you could take out a reverse-mortgage
to provide an income. Eventually, you can bequeath it to your heirs. But
you can do none of these if you had been renting all along…
Rent it
out - Become the landlord yourself! Let your
tenant help you pay off your property. Rental property is always in demand.
For every one sales inquiry we receive there are at least five rental
inquiries!
