Traditionally, there are things in life that are expected of you. Throughout your childhood, you were made to believe that all adults should go to college, build a career, get married, buy a house, get married, and eventually retire. Your whole life has already been mapped out for you.
But in 2022, things are very different. We have greater levels of freedom and tolerance than ever before, and it’s completely acceptable for anyone to carve out their own path. If you want to live the single life forever, that’s fine. If you want to live with your partner without getting married, that’s OK too. And with the rising cost of house prices worldwide, you’d be entirely forgiven for not wanting to blow your finances on a new home.
Many people are opting to rent instead of buying homes, and money is a big consideration in this decision. Both renting and buying both have their own advantages and drawbacks, but the decision ultimately comes down to your own unique set of circumstances. If you are unsure whether to carry on renting or to take the leap towards home ownership, here are some pros and cons to help you make up your mind.
- In the long term, the mortgage you pay may be cheaper than the total rent.
- Buying a property gives you an investment that can set you up for future financial security. It will benefit from capital appreciation so you can sell it at a profit, or you could even use it to generate passive income by renting out a room or a driveway space.
- Your home will be your own property, so you can make any changes or upgrades that you wish.
- There are plenty of mortgage lending products that allow you to make monthly payments at a rate that suits your financial circumstances.
- You will need to make an initial down payment when taking out a mortgage which can be a significant financial sum.
- There are other additional costs such as conveyancing and legal fees.
- Selling a home takes time, so it is a lot more complicated if you decide to move.
- Home ownership makes things much more difficult in the event of a breakup with your partner.
- Renting gives you much more flexibility to move home quickly and efficiently.
- Renting is much more immediately affordable and contains far less financial risk.
- You won’t have to worry about carrying out maintenance and repairs.
- You may be able to afford to live in an area where homes are outside your budget.
- Renting involves far less paperwork and admin, meaning you can move in a lot quicker.
- By renting, your money is not going towards something you own.
- Your rental property is not yours so you may not be able to make changes or upgrades.
- Your rent could increase with each tenancy period.
- Even if the property grows in value over time, you don’t stand to benefit.
So is it better to rent or to buy? For first-time buyers, renting is a much more attractive option as it is easier financially and it offers more flexibility to accommodate life changes. However, buying is a better long term solution as it allows you to put down roots and have a place to call your own.