Should you buy or rent

Should You Rent or Buy?

What are the advantages of buying versus renting? Consider the pros and cons of each and whether your motivation to buy matches the lifestyle you have or want to have.


Why should you buy a property ?

Each and every one of us dreams to have our own home which we can design, build and manage in the coming years with our loved ones. This gives a feeling of achievement and steadiness to them. Unfortunately, the rapid increase in values in the property market in recent years has dampened many home ownership dreams. Not every one can buy a home for themselves because of the high real estate prices.

Home ownership is a long-term goal and needs proper planning, prudent budgeting and saving strategies.

Not everyone is willing the to make the type of sacrifices that home ownership requires and thus will decide to rent instead.  Help yourself to make the best decision by considering some of the pros and cons of buying appended here:


Security: If you have a place where you can call your home then you as well as your family would feel secure and it is also convenient. If you want to decorate or restore the house, you can do it easily without worrying about the leasing terms. Moreover, you are not subject to the whims of a landlord who has control over the length of your tenancy and rental cost.

Investment: As long as the value of your property is appreciating or maintaning, you are growing equity in your property. The rise in the equity of your property can be used later to secure additional loans for further investment or retirement.

Saving plan: If you buy a property then you will have to save your money to pay off the home loan.  It is like a type of forced savings strategy.  Once you have paid off your mortgage, you will free up a large portion of your income which will lighten your financial burden and provide surplus for other investments.

Standard of living: When you buy a home you can decide on the décor and design for your home which will suit the way you live. This is a huge incentive for many people to become home owners.  On the other hand, if you rent a property, the time, money and effort spent on decorations and enhancements will not return to you after the lease expires.  In fact, sometimes you may have to re-instate to the original conditions. In home ownership, every bit of enhancement will help in its value appreciation.

Tax incentives: If you are buying the property as an investment then the interest on the monthly repayment of the mortgage is tax deductible. You can benefit from this if you are planning to rent the property.

Status: When you own a really nice place then it is the indication of your power, wealth and status. Having such a status will give you advantages and one of the benefits is that your credit rating would be high. The favourable credit ratings will be useful for future leveraging.


Struggle to save deposit: Depending on the market you are hoping to buy in, getting a deposit together can take several years of saving every spare cent of your income and changing your view of ‘essential’ spending quite severely. It can mean a lot more than taking cheap holidays, cutting out take-aways or limiting going to the restaurant. Buying in bulk, taking lunch to work, getting rid of credit cards and forgoing expensive outings might be just the beginning, not to mention switching to public transport if you have a second car or giving up expensive habits.

High Cash Outflow: Buying a house means higher cash outflow as compared to paying the rent every month. Moreover, you are responsible for payment for council rates, taxes, insurance, repairs, maintenance charges, etc. You will find that such expenditures take away a huge portion of your earnings – a huge financial burden.

Depreciation in value: There is a risk in any investment that its value will depreciate. If this happens to your property you stand to make a loss in the event you decide to sell.

Interest rates: The interest rate normally will increase every year. If you are finding it difficult to pay the mortgage every month then it would be tougher for you to pay it when the interest rates increase. While leasee can also face rent increases, it is possible to negotiate this with your landlord – or otherwise move.

Location bound: Some people are nomads. They like to move around regularly. Whether it be for career or lifestyle reasons, the thought of being bound to one place seems boring or threatening to their sense of freedom. Moving regularly is expensive in itself, but the transaction costs buying and selling every few years is likely to cancel out any appreciation of the property.