As most existential questions the one of buying and renting is not an easy one to answer either. It is by no means a straightforward decision to make and what makes matters worse is that every choice you make brings consequences. Quite frankly unless you have a house to inherit the situation is: “Damned if you do, damned if you don’t”.
In this first blog post, we will discuss renting.
In the previous blog post, we discussed a phenomenon, noticeable in the past few years in Australia – we are becoming a nation of landlords. Even those who can afford to buy, sometimes can’t afford to live in the property they buy so they rent it out. That being said renting a property has both its advantages and disadvantages.
The pro’s of renting
– Renting offers more flexibility than owning. When it comes to renting a property, this is one of the #1 reasons why people prefer to rent. It just allows more families and individuals to travel, follow career paths in different cities, countries and even continents. Nowadays with the level of globalization, you can be pretty much anything you want to, anywhere you want to. Owning a house ties you down.
– No need to pay for property maintenance. There’s a cracked tile on the floor, the roof is leaking and the plumbing needs to be changed. These are expensive repairs, you don’t have to worry about. It is your landlord you call and they are magically replaced and fixed. All that is requested from you is that you don’t deliberately break things and you carry a thorough end of lease clean at the end of your tenancy.
– Lower cost upfront. In the long term it might be more expensive to live on a rent, but all you need in order to move to your new place is a two months rent and a deposit prepared in advance. This allows you to use a bigger chunk of your money (that would’ve otherwise be spent on a house and maintenance) and invest them in your own business or something that will bring you better ROI (return on investment).
– It can help your credit score. Having a bad credit score can affect numerous areas of your life. Even some employers will judge you by your credit score and can refuse to give you work. That being said, having a history of on-time rental payments can redeem you in the eyes of creditors and allow you to qualify for a good mortgage deal.
More Info: How to rent out your property. Useful tips.
The con’s of renting
As most things in life renting has a dark side too.
– You are at your landlord’s ‘mercy’. You stay for just as long as he doesn’t need the property. As soon as his children get married and have kids, you might need to go find a new place to stay, as he is likely to want to give the home to members of his family.
– You can be a subject to a fluctuating rent. You started off at an affordable monthly rent, but then it just keeps getting higher and higher with every rental period.
– You are limited in decorating the home. Sometimes its hard to make a rented property feel like your own, especially when you need to ask your landlord about every minor detail you want to introduce or remove/replace.