The question of whether one should rent or buy a home has been a long-standing debate. While people have strong opinions on the matter, there are clear advantages and disadvantages to both options. Below is a closer look at the differences between renting and buying.
Yesterday’s norms vs. today’s norms
Many years ago, the general norm was to rent until you could afford to buy, and many people believed that owning property was an indication of achievement, success, and independence. However, times have changed, particularly in terms of the economy and the financial landscape.
Today, many people choose to rent long-term or even for life, not always because of financial reasons. In today’s economic climate of fluctuating interest rates and general uncertainties, many find themselves wondering whether renting or buying a home is the best option.
Advantages of homeownership
One of the main benefits of homeownership is the accumulation of equity. Through mortgage payments, individuals gradually build equity in their property, creating a valuable asset over time, according to capetownetc.
Another benefit is that the sense of ownership leads to stability and the freedom to personalise living spaces, fostering long-term plans devoid of lease expirations or rent escalations.
On the topic of renting vs. buying property expert Richard Huxham-Hardie said that renting essentially means paying off someone else’s bond.
“Property has proven consistently that it is the best long-term investment to make. The sooner you can get on the ladder, do it. Also, you don’t have to live in what you buy.”
Richard Huxham-Hardie
The downside of purchasing a house
In addition to the benefits of homeownership, there are downsides to consider. Probably the most significant is the financial aspect.
Along with the property price, there are other costs such as upfront deposits, closing fees, and potential inspection expenditures. Ongoing maintenance expenses further influence the financial side of homeownership.
Owning property involves an element of unpredictability. Factors like unplanned costs and property value fluctuations are part of this.
Why rent?
Renting offers flexibility and is less of a financial strain compared to buying. It is typically easier to move when renting because there is no property sale involved, eliminating the need to consider market value. Additionally, maintenance is usually the owner’s responsibility, not the tenant’s.
Investopedia highlights accurate budgeting and lower insurance costs as other advantages of renting. The amount a tenant pays for rent is fixed for the span of the lease agreement. This allows better financial planning. Tenants may insure the household content but there is no need to insure the property as that is the owner’s responsibility.
What, in your opinion, is better – renting or buying?
Let us know by clicking on the comment tab below this article.
You can also email [email protected] or send a WhatsApp to 060 011 021 1.
Follow @TheSAnews on X and The South African on Facebook for the latest news.
