Should You Buy or Rent Your First Home?

Buying properties is a very good idea as it gives you the ownership of the properties. However, sometimes, renting properties may also be a good option to consider. Both buying and renting properties have their benefits and shortcomings. For instance, when you rent a property, you would save more money to expend on other projects in the short term, while buying a property gives you a sense of ownership and security and also the option to sell your own home through a series of independently run private home sales. There are times and situations where buying properties are the better option for you, same thing with renting properties. Here are all the benefits and shortcomings of buying properties versus renting properties to help you make a better decision on what investment decision will better suit you and your best way to achieve a return on investment.

Benefits of Buying Properties

Buying properties offer you the long-term benefits of ownership, equity, security, and potential growth in personal wealth/properties. The value of the purchased properties appreciates over time to your favour. If you eventually decide to sell off the properties after some years, you would earn a profit from the sale. Buying properties gives you greater freedom in their use since they become your legal property. Hence, you would not be faced with restrictions often enforced by property-owners. Buying properties gives you creative control over the properties. Being your properties, you can alter them, renovate them, and make changes to their décor and landscaping to suit your style and needs. You may decide to rent out your purchased properties, which enables you to generate income from the properties.

Shortcomings of Buying Properties

Buying properties comes with huge financial obligations, such as regular house maintenance and bond repayments. There are additional costs associated with buying properties, this includes down payment, insurance, upfront costs, taxes, inspections fees, rates, etc. You stand the risk of not making any income from your properties through resale. This may be caused by economic factors like high-interest rates, recession or poor location. Most properties are not mobile and would, therefore, limit your mobility as the owner, unlike a renter who can leave a property at any time after fulfilling the notice period.

Benefits of Renting Properties

Renting properties gives you more flexibility than buying properties. Renting properties is a better option for those who are often faced with sudden changes in their location, such as job relocation or those who don’t intend to stay in one place for a very long time. Renting properties gives you access to those properties in an area where you can’t afford to buy the properties.

Renting properties doesn’t limit your mobility. It is very easy for you to move out without the stress of looking for someone to take over the lease or purchase the property. Renting properties does not require any serious maintenance work, which is left to the property owner. Renting properties enables you to save additional money, which you can invest somewhere else.

Shortcomings of Renting Properties

Renting properties binds you to the rules and terms of the lease agreement, which will certainly affect your freedom of use of the property. You cannot alter rented properties to suit your need and style without seeking the consent of the property owner. Most times when you rent properties, you will have to deal with Rental Agents who are 3rd parties and act as the liaison between you and the property owner. With the involvement of third party agents, issues that need immediate attention may eventually take a longer time to be resolved. Renting properties does not in any way offer any income generation or return on investment for the renter since he or she doesn’t own the property and may not be allowed to sublet.

Finally, when you rent properties, there is no assurance that the lease would be renewed when it expires even if the properties are very useful to you or you carefully observe the lease terms. In conclusion, if flexibility is your priority, then renting properties is your best option. This is because when you rent properties you are more mobile and you can easily stop the use of the properties at the end of the lease.

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