When it comes to the Renting vs Home Ownership debate, there are a number of important things to consider before deciding which option makes the best financial sense for you.
On the last Rising Tide blog post, we looked at the downsides to renting as opposed to buying. This week, in the second instalment of our two-part series, we’ll focus on the upsides to renting and look at the many benefits offered to tenants.
One of the key aspects that attract people to rental properties is the sort of lifestyle that renting can afford. For those who want to live close to the city, sometimes renting can be their best bet.
Not only can rental prices be considerably lower than the average mortgage repayment, but living close to the city can also mean substantial savings in terms of transport. If public transport is readily available, there may be no need for a car which means you’ll save on petrol, parking, tolls and registration.
At Rising Tide, we’re beginning to see an increase in the amount of young people choosing to buy a rental property in the area they can afford, but rather than sacrifice their lifestyle, continue to rent in their preferred area closer to the city.
No additional fees
Most rental agreements will require tenants to pay an agreed upon sum at the beginning of each month, and a refundable bond at the commencement of the lease period. And that’s it!
On the other hand, when you own a home, you’re not only required to pay your mortgage, but you may also be responsible for a whole host of other expenses too. Homeowners pay stamp duty, council rates, body corporate fees and more. It doesn’t take long for these figures to start to add up.
Unlike tenants who can rely on their landlords to cover the cost of certain necessary repairs, homeowners must front the full cost of any required maintenance themselves.
Flexible cash flow
For many younger people, buying their first home can mean handing over a large chunk of their savings to go towards a deposit. By choosing to rent, you can hold on to that deposit, and even save more by renting for a lower price than you would while repaying a mortgage.
Having a more flexible cash flow opens you up to a world of possibilities and other options to start making your money work for you. You could consider investing this surplus elsewhere and growing your liquid assets, whether it be in shares, managed funds, or Super.
So which is right for you? Whether you’re a renter looking to buy, or a homeowner wanting to explore your options, we can provide you with advice on how to best move forward.
Call us at Rising Tide today on 03 9600 2124 to find out more.