Is it better to rent or buy a property?
Category Top Property Tips
When it comes to deciding whether to rent or buy a property, there are many factors one has to consider. Each comes with its advantages and disadvantages. Seeff explores these factors to helps you make the best decision based on your current situation.
Personal circumstances
Personal circumstances are almost always a determining factor as to whether we rent or buy a property. These situations could be anything from employment status, personal relationships, lifestyle choices and family situations such as pets and children. For example, A job might require you to relocate to a different part of the country within a year or two, so you may prefer not to be tied into a long-term purchase.
In South Africa, there is a strong culture of property ownership. South Africans will generally aim to own at least one property. European culture, in comparison, owning property is not a substantial part of the culture, due to affordability.
Financial factors
Your financial situation plays a crucial role in the decision to rent or buy a property.
It’s not only the cost of buying a property that comes into question, but the additional long-term expenses that come with buying a property. Such as rates and taxes, maintenance, insurance and other unforeseen costs. Very often, it is merely more affordable to rent.
Benefits of buying property
Owning property is certainly preferable if you can buy without over-extending yourself financially, as it provides the type of safety net renting a property can’t provide. If you have chosen to buy a home in a good area, the plus is that its value will increase over time.
Should you sell the property in the future, you stand to make a profit or at the very least have the same value back in market terms. A plus that comes with owning a property is that you can rent it out and earn an income from that rental.
Owning your property means that you have full control over any building alterations, garden design and general appearance.
Benefits of renting a property
For a modern lifestyle, renting a property is a far more flexible option. There are no long-term financial commitments, although the rental fee will likely increase by at least inflation each year.
You could potentially rent in an excellent area where it would be too expensive for you to buy. The homeowner is liable for maintenance, insurance and taxes, whereas a tenant would only be concerned with insurance of the home contents and rates.
When moving out of a rented property, you have no concerns over what happens to the property going forward. However, you will also have limited creative freedom in terms of making the home your own, without the owner's permission first.
Unfortunately, renting offers, no return on investment since the tenant is effectively paying towards the instalment on the homeowner’s bond.
With years of experience in both property sales and rentals, Seeff is home to your go-to property experts.
Author: Seeff Head Office
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