5 Reasons to rent rather than buy
Sometimes it’s better to rent than to buy. Read on to discover the top 5 reasons to rent rather than buy.
As soon as you start earning a decent salary your attention may shift to property listings as you begin
to analyse where the “good areas” to buy may be located.
This is probably because you have heard the same line over and over again: “try and buy straight
away so you are not paying off someone else’s bond” – but is this the right advice for everyone?
Depending on your age or your season of life, renting may be the better solution to both your
financial and lifestyle needs.
Here are 5 reasons why you should rent rather than buy
1. Cash fund first
Have you recently started a new job or business? Perhaps your work is more project-based, like a
contractor or a freelancer.
Buying a new home will bind you to a long-term financial commitment which needs to be honoured.
Renting allows you to first settle down and accrue funds slowly so that you have the peace of mind
that you could cover your living expenses for at least six months.
2. Property binds you
Buying a property will mean you are bound to a location or certain area. What happens if you are
offered a new and exciting job across the country or even internationally? You would have the
burden and extra cost of commuting to and from work every day or the urgency of selling your
house on time should you want to relocate.
With renting, you are able to up and go with as little notice as one calendar month, depending on
the terms of your rental contract.
3. Invest on your own terms
Since you aren’t paying off a mortgage or holding the risks and costs associated with being a
property owner, you are free to invest elsewhere. This could include starting a business or nurturing
your retirement funds.
Choosing to rent instead of buying a house allows you to develop a comfortable cash fund and opens
you up to other investment possibilities. While buying a home can be a smart investment, it is not
the only option you have.
Yard work? What yard work? Renting a home will mean you are devoid of any maintenance work
and it is your landlord’s responsibility to maintain the property. While not all rental contracts are the
same and may include different terms and conditions, a great bonus is that home maintenance,
property taxes and any other property related issues are not your responsibility.
It is also your landlord’s duty to act timeously on all maintenance issues that you raise with them.
This includes any breakages such as a geyser bursting or your gate or perimeter fence breaking.
5. Upsize faster when your family grows
Buying a small starter home may seem like a good idea at the time, but after your first or second
child, space may start to get a little tight.
If you opt to rent instead as a young married couple, moving into a bigger place will be a much
simpler task. Selling your old house and buying your new house at the same time may become a
complicated endeavour where you end up paying two mortgages at the same time for a couple of
months or even years.