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Rent vs Buy

Rent vs Buy

Rent vs Buy –

The pros cons of renting versus buying are:

Buying

Renting

Building Equity – You’re increasing equity in your property like a savings bank account.The rent payment goes to the landlord, you have nothing at the end of the rent period.
Capital gain – Generally over the long term house prices increase, so as the price increases your equity increases. This may give you enough equity to upgrade in the future or downgrade to reduce debt. There may be periods of instability where house prices decrease though.The capital gain goes to the landlord.(Or Loss)
Outgoings – Buying usually has more outgoing expenses for the same type and location of house than renting depending on the exact circumstances.Renting usually has less outgoing expenses per month than buying.
Stability – You’re in control of whether you want to stay or move.Less stability – Some times a landlord may decide to evict you for any reason they decide.
Freedom to renovate – If you decide to spend your money improving the property you can do what you want within council by-laws.Some landlords are very restrictive on what you can do with their property and if you improve it they reap the value increase.
Moving location– is more complicated by having to sell a house, which takes time.It’s easier to pack up and move, since there’s no house selling involved.
Maintenance – Can have unexpected costs if something breaks or needs to be repaired.The landlord is generally responsible for maintenance and repairs unless they can show you’ve caused the problem, in which case they may try to recover costs from you.
You pay – Rates, insurance, etc.Landlord pays– rates, insurance etc.
Cost Changes– Mortgage payments can fluctuate according to increasing or decreasing interest rates.The rent generally increases over time.
Discrimination – As long as you have enough money there’s less likely to be discrimination.A landlord or their agent has the power over who they choose to occupy their house.

rent vs buy

Continue to part two of the Buying A House Guide

Buy A House – Budget

Go Back to the start of Buying A House Guide

House Buying Guide page order:

1. Pros And Cons Of Owning Versus Renting. This Page

2. House Buying Budget

3. Selling Your House And Then Buying Another One

4. Cost Of Living Once You’ve Moved In

5. What Do I Need Versus What I Want

6. Choosing A Property

7. Building Types

8. Understanding Purchase Methods

9. The property Search

10. Researching The Property

11. Making And Settling An Offer

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