If you are thinking about moving rental properties, you may well be weighing up the possibility of buying a home against signing on for another rental agreement. While many people believe that renting is akin to throwing money away, the issue is not quite so black and white. Learn more about the benefits and disadvantages of both options before deciding which is right for you.
Advantages and Disadvantages of Renting
Renting is not just an option for those who cannot afford the down payment on a home. Choosing to rent or buy is a decision relative to the circumstances you're currently in.
- Any maintenance issues are the responsibility of the property owner.
- Moving is a relatively easy process. You don't have to wait for your house to sell before you can take a job offer in a new city or move to a different neighbourhood.
- It's always possible that a property owner will decide that they no longer want to rent to a particular tenant. Knowing that your ability to stay comfortable in the place you call home is up to someone else can be nerve wracking.
- Competition in the real estate market has made renting more common. This competition means that rent prices continue to increase.
- Renting doesn't allow you to own an asset.
- You can't make alterations to the property as you see fit.
Advantages and Disadvantages of Buying
Just like renting, there are some pros and cons associated with buying a property, including:
- Mortgage payments associated with a fixed interest rate are set, so you'll be able to budget your housing repayments without worrying about an increase in the overall amount owed.
- You retain the right to make modifications to your home without having to ask permission of a landlord.
- If you have trouble saving money, paying off a mortgage acts as a forced savings plan. You're buying an asset that can be sold in the future.
- The price of buying a home may make it impossible for you to live in your desired location.
- Buying a home can be restrictive should you decide that you want to move.
- Anything that goes wrong on your property is your responsibility. You'll have to cover the costs when maintenance issues crop up.
So what's the answer?
Now that you know more about your options, how do you decide which one is right for you? Unfortunately, there is no right or wrong answer when it comes to deciding whether renting or buying is right for you. It really depends on your individual situation. Can you afford to buy a home – do you have the funds available to you to afford the deposit? Evaluate your budget to determine whether it would be reasonable for you to save up this amount. In the end, the choice depends on what makes you most comfortable within your current circumstances and budget.