Home ownership is known as the ‘Great Australian Dream’ and can be a wonderful achievement for many. However, buying a home is a lifestyle choice so it’s good to consider the pros and cons of both renting and owning a home to help decide what's best for you.
The Pros and Cons of RentingThe pros:
- You can stay financially free without having any mortgage debt
- You can lease the home for an agreed time and without being tied to one home
- You’re not responsible for maintenance and repairs, the landlord is
- You can rent a home in the area that you may be unable to buy in
- Your rent will stay the same for the agreed length of your tenancy
- You will be paying someone else’s mortgage
- You can only live in the home for the term agreed by the landlord
- The landlord may not renew your lease or decide to sell the home
- Many rental homes don’t allow pets so this may limit your options further
- Your landlord can increase your rent so you’re forced to pay more or move out
- You will need to receive permission to customise the home to suit your taste
- You will often need to pay a bond and advance rent each time you move
The Pros and Cons of Owning a HomeThe pros:
- Your home can be a great long-term investment and grow in value
- You get to do what you like with your home provided it’s within council regulations
- As your loan reduces, you can use the equity to renovate or buy another home
- You will be your own landlord so you can have pets or children
- The choice of location is up to you so you can shop around for a suitable home
- You can't be asked to leave with the need to find another home
- You will need to manage a mortgage and be comfortable managing debt
- There may be costs involved with purchasing such as stamp duty and lawyer fees
- You will be responsible for maintenance, repairs and council rates
- Your budget may limit you to suburbs outside of your preferred area
- It may be difficult to save up for the required deposit for your first home
How Much Rent Are You Paying?
Are you renting? Have you taken the time to work out how much you’re actually paying towards someone else’s mortgage?
For example, to rent a home for $450 per week, it would cost you more than $23,400 per year which could equal more than $702,000 over 30 years! That’s assuming rental prices don’t increase (which they will) during that time.
Imagine if that was money towards your very own home instead. Buying your own home can be very fulfilling and exciting. It’s a great achievement and your moment to stamp your character on a place and invest into your future.
The sooner you become a home owner, the sooner your property can grow in value and provide even more future opportunities!
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