Buying VS Renting a property
Category Buying a house
If we have learned anything from the past few years of economic turmoil it's that the property market is a dynamic and ever-changing beast. From homeowners selling up their urban properties and moving to more scenic locations due to the inflation rate attracting renters to the buying market, playing the property game has left many feeling uncertain and anxious.
We as property brokers have kept our fingers on the pulse of the market scene, granting our clients and readers the insight they need to make informed and well-reasoned decisions about where, when, and how to buy. In this article, we'll explore the various pros and cons behind renting vs buying as well as offer advice to potential homeowners looking to settle down right here in Harties.
The pros and cons of renting an apartment or a home
There are various pros and cons to renting a home just as there are to owning one. Each option comes with its own set of advantages that may suit an individual depending on their financial situation or lifestyle requirements.
Pros
For those who have dynamic lifestyles and are not 100% sure on which area they want to settle in yet, renting is perhaps the preferred decision. Renting grants you flexibility and is an ideal option for those who could face sudden changes in their lives such as job relocation. There is no requirement for long-term commitments from the tenant which means that all maintenance repairs and costs are the concern of the landlord.
Tenants will also have the option to move to neighbourhoods that may have previously been out of their budget if they had decided to buy instead. This offers you greater freedom of choice of security and the convenience of access to higher-end shops and amenities in the local vicinity.
The option to move out, usually after a month's notice, without having to find someone else to cover the lease makes renting an attractive option. What's more, after rent is paid, tenants have the option to save their money and put it towards a home investment later on.
Cons
Although tenants have increased flexibility, they are also bound by the lease agreement put in place at the landlord's discretion. This may impact your ability to renovate or personalise the property you live in without prior consent from the homeowner.
If you are renting through an agent, they will often act as a liaison between you and the landlord meaning that 3rd party disputes could occur and take longer to resolve. Beyond this, tenants also receive no benefits in terms of investment opportunity since their rent is paying off someone else's prospective home loans.
Finally, renters have little control over the state of their lease agreements and annual changes to their rent increase. Once it expires, landlords have the ultimate say on whether it can be renewed.
Ultimately as a tenant, you have little control over asset equity meaning that your rent is simply paying off someone else's bond as opposed to going towards your savings for a home of your own.
The pros and cons to buying a home
Entering into the home buying market can have potential risks on financial obligations set. However, the freedom of owning property, especially considering the current low-interest rates, may be the perfect solution.
Pros
Owning a home means having access to the potential long term benefits of asset equity, personal security, and the opportunity for future investment should you decide to sell later on. Owning a home also grants you a sense of freedom, you have full control over renovations, allowing you to personalise your property in the manner you see fit.
As a homeowner, you also have the option of buying to rent. Using your property as a form of income and becoming the landlord in the process. Homeowners also have an opportunity to increase their overall credit scores the more assets they have in their name. Owning property represents a large chunk of your asset equity, increasing your credit profile in the process.
With owning a home you also have access to refinancing your bond when withdrawing money to pay for renovations and upkeep. When buying a house to rent, homeowners have the opportunity to save money in the long term thanks to possible tax deductions that may be awarded to income-generating property.
Cons
While not necessarily a bad thing, being a homeowner comes with a host of financial responsibilities. These include bond repayments, rates and taxes, insurance costs, and the general upkeep and maintenance of the property.
Beyond your cost concerns, homeowners also bear the risk of not making any profit through resales. This may be down to several external factors which may affect the economy such as recession or a sudden spike in interest rates. A homeowner may also find themselves in the unfortunate situation of seeing their neighbourhood plummet in desirability.
Homeowners also have less mobility which means that short term lifestyle changes are harder to adapt to. While tenants need only give a months notice (depending on the contract), homeowners are subject to the time frame it takes to sell their home before buying a new one. This means that the decision to move may take a lot longer. Transfer processes alone take a minimum of three months.
The benefits of buying in a new development in Harties
As time goes by, we have observed that more and more homeowners are opting to buy newly developed properties with construction companies and developers working overtime to fill this gap in the market. This is particularly true in suburban areas like Hartbeespoort.
There are numerous benefits to buying a newly developed property including financial (such as avoiding transfer duties), maintenance options, and peace of mind which comes from the security provided.
Furthermore, new developments present exciting investment opportunities where homeowners initially only need a downpayment of 10% of the property until completion. This presents an opportunity to sell the home at a higher return and avoid paying capital gains if sold before completed.
Property Tree is particularly invested in a number of new developments both in Harties and George. Start becoming a savvy investor today by browsing through our various new development projects in the works.
Take a look at our new developments:
Whether you're looking for your dream home or a home with solar energy in Harties, contact us at Property Tree and let our professional group of real estate agents find the right home for you!
https://www.property-tree.co.za/ or contact us: https://www.property-tree.co.za/contact/
Author: Bryce Anderson