Buying vs Renting: What’s better?
One of the biggest investments you will make in your life comes down to buying a home. It’s a complex decision, that shouldn’t be one you make solely because everyone else around you seems to be doing it. Owning a home is definitely a lifestyle choice — much like choosing to rent. Either option requires thoughtful consideration as it’s important to love where you live especially since you’re going to be spending a lot of time in it.
Your financial situation, as well as life goals, will largely influence your final decision but we’ve put together a quick list of reasons for both sides of the property spectrum.
Is it worth buying a property in Melbourne?
Buying a home is better because….of Security and Pride.
As mentioned above, owning a home is potentially one of the largest investments you’ll make in a lifetime. Owning your own house or apartment acts as a security measure, more so when you have a family. It reduces the uncertainty that comes with renting and having to move. Additionally, there is a sense of pride and accomplishment associated with owning your property!
Buying a home is better because…. of Renovation and Long-term Value.
A report conducted by Aussie and Corelogic stated that over the past 25 years, the median house value nationally has risen by 412%, or $459,900. Which means that if property prices were to rise at the same rate as the past twenty five years, Australia’s median house value would reach $2.9 million by 2043.
You get to call the shots when you gain control of your own property. Renovation is key to helping boost that long-term value; knock down walls or extend it — do as you please to truly turn your home into a castle. Aussie.com reported a boost in median house values by 412% in the last 25 years which means it’s all only up from here.
Buying a home is better because… of current Low-Interest Rates.
Often a low-interest loan can work out to be less expensive than renting in the long-run. The monthly payments can be quite low, and ultimately, you’ll be working towards paying off a home that’s simultaneously increasing in value. Renting a nicer place might look like a more feasible option but as the saying goes, “Rent money is dead money.”
“Rent money is dead money.”
Buying a home is better because…. it’s a Valuable Asset.
If we didn’t say it enough times above, let’s go over this one more time — a home is an asset that has historically increased in value. It can be sold for profit especially if renovated and maintained. When you rent, you’re technically paying someone else’s mortgage off. At the end of 10 years, you’re left with nothing. Yet, after 10 years of paying off a home, you are left with 10 years worth of repayments.
Is it better to rent a property in Melbourne?
Renting a home is better because…you have more freedom and flexibility.
Renting can be cheap and also gives individuals a much wider berth when it comes to lifestyle choices. If you’re the kind of person who values being able to move at a moment’s notice or living life by your own rules then renting is the best option for you.
Renting is better because…you can invest in other things.
Have the best of both worlds with ‘Rentvesting’!
Rent property in a suburb of your choice, whilst you buy property elsewhere. Investing in stocks is also an option if a property is too steep. Renting a property comes with fewer upfront costs, letting you invest actively. Stocks are considerably easier to sell as well, giving renters much more liquidity.
Renting is better because…there are no property Maintenance Costs.
It is stressful being the owner of your own property. As a renter, you needn’t worry about serious maintenance issues or costs because all of that is your landlord’s responsibility.
Property upkeep, council rates, insurance costs — it’s all free sailing for you.
So you want to keep renting?
Great! Hopefully, we can help you find a place that you love. View our rentals here.
So you’re thinking of buying a home?
Since buying a home is quite a process, here’s a few tips for those looking to become new homeowners.
Essential Tips on Saving:
Most people would aim to save 10% – 20% of the value of the property, along with the cost of stamp duty and other upfront costs. Your ideal deposit would be 20% + stamp duty. There are also a lot of different Government grants, reduced deposits and incentives to look into. A basic outline of what your process should look like is as follows:
- Save accordingly.
- Sort out your financial options.
- Conduct research and create a checklist of things you absolutely want in a home.
- Start inspecting!
- Learn how everything works – look up negotiating and common property practices.
- Ensure you do your due diligence with building inspections, contract reviews, etc.
- Finalise, make an offer and purchase.
- Settlement and move-in.
If you’re still debating between buying or renting a property, do further research within suburbs of interest. Our team would also be happy to assist you through a quick consultation if needed!
Buying a home is a big decision and you want to be sure that you are going into it with as much knowledge as possible. If you have any questions about buying a property, please don’t hesitate to call us, we’re here to help.