Should you buy a property or just rent one? On a month-to-month basis, it seems that renting is a better option since monthly repayments do not tie you down and you don't have to deal with the changes in the property market. However, since the RBA has cut down rates, houses have seemingly gotten more affordable. And all these make choosing even more confusing.
But don't worry. In this article, we'll show you things you need to consider so you can finally decide which option is for you. Here's what you need to factor in...
- The location. The practicality of buying or renting depends on where you want to live. Some suburbs, for example, have properties that are more affordable, which only makes it sensible to buy a property there instead of rent one. Again, you should weigh your options according to where you wish to live, as figures vary from state to state.
According to a report by RP Data, there are currently 238 suburbs where it's cheaper to buy than rent a property. For example, buying a unit in Berkeley Vale in Sydney is $385 cheaper than renting one. Meanwhile, units in Mount Hawthorn in Perth are usually $742 cheaper if you buy them.
- Your budget. Of course you need to figure in your budget too. If you have enough money to buy a house without sacrificing your overall finances and the little luxuries you enjoy, then go ahead and buy. Otherwise, it would be a wiser choice to rent instead.
- How you would use your extra money. It only makes sense to rent a property where affordable ones abound if you are planning on investing the extra money that you save. By investing your money, you simply use your money wisely by growing it. Otherwise, you might be better off scraping together that extra money to buy a property instead.
Using units in Mount Hawthorn as an example, the $742 difference in renting and buying is a significant one. Investing that money could yield a considerable amount of money, so you will really be better off using it wisely.
All in all, making the choice between renting and buying is all about making a practical choice. Again, consider your budget, the area where you wish to live, and what you want to do with the money if you're planning on renting.
If you decide to buy a property instead, contact the qualified advisors at Rate Detective first. They will assess your personal circumstances and provide you with rate comparisons based on that. Contact us today!