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Renting vs buying your home

8 Nov 13

It's a question many people face at some stage in their lives: Should I rent or buy my next property?

There are a number of factors to consider when making the big decision, so strap yourself in for the following real estate advice.

For many years, experts have claimed that rent money is dead money. You can spend years paying regular rent on a home without coming out of it with any asset at the end, whereas with a mortgage you eventually end up with a home to call your own.

Recently, however, Australians have started to come around to the idea of renting homes. Data from the 2011 Australian Census showed a slight decline in outright home ownership from 2006 results, and a slight increase in rental tenures over the same period.

Homes can be a huge investment, and it doesn't just stop when you've made the initial deposit. Houses cost money to run, plus you'll need insurance and no doubt have rates to pay too. If something breaks or goes wrong in your home, as the owner it's up to you to fix it. When you're renting, these costs often go to your landlord or property manager.

Generally, rent on homes is less than what the mortgage repayments are. This allows renters to spend or invest money saved on other things.

Home owners, on the other hand, often get a sense of pride in having their own place. When you own a property you can make as many renovations and redecorations as you like, without having to check with the landlord.

A home is also an asset that can be used as security when applying for loans. Making home loan repayments is also often seen as compulsory saving, plus there's the added benefit of knowing you only have to move out when you decide the time is right, not when the property manager or owner tells you to.