Is it better to buy or rent? Here are some of the pros and cons for each scenario.
 
Pros of renting
  • Flexibility – if you need to move for whatever reason, it’s much easier to do so as you’d only need to complete the lease term or discuss your options with your landlord/real estate agent.
  • You can try before you buy – through renting experience, you can better gauge what sort of house or location suits you best before you make a permanent commitment like buying a house.
  • There are fewer maintenance costs associated with renting, for example, council rates, building insurance and emergency services fees are usually paid by the owner.
  • Renting may give the option to live where you can’t afford to buy.
 
Cons of renting
  • Limitations – you are answerable to a landlord and likely to have restrictions relating to the appearance of property. You need to seek permission to make any changes like painting or hanging fixtures to the walls.
  • Property inspections – the real estate agent or owner, given an appropriate notice period, can hold frequent inspections which can be inconvenient for the renter.
  • Uncertainty – your landlord controls what happens to the property, they may unexpectedly decide to sell or move in to the property when the lease ends, leaving you to find an alternative with little notice.
  • You are likely to be paying towards home ownership for someone else. All the money you put in is not for your personal benefit compared to building equity in your own home.
 
Pros of buying
  • Purchasing your own home is a great achievement and likely to be the biggest investment you will ever make. Buying a home is goal oriented, knowing that you are working toward full ownership.
  • Freedom – as you own the property, you have free reign on how it looks and can improve any of the living spaces as you see fit.
  • Investment – purchasing a home can be a good investment and depending on various economic conditions can be a stepping stone to an ever better property. Purchasing a home can also contribute to your wealth and be passed on to family.
 
You can watch John Oliver, HomeStart CEO, discuss the key benefits of buying a home, such as providing financial security and flexibility to turn a house into a home with your own personal touches.
 
Cons of buying
  • There are many upfront fees and charges in the home buying process as well as the ongoing maintenance costs such as council fees, which can make it considerably more expensive than renting. Relocating for an interstate job, for example, could be difficult at short notice.
  • Buying a home fixes your location – it’s much harder to sell a property and move compared to renting.
  • There is always an element of financial risk when purchasing a home as its long term value is hard to predict and a range of factors contribute to whether it gains or falls in value, however history shows that property does increase in value over time.
 
Remember, despite the pros and cons of each situation, either is an ongoing financial commitment dependent on your personal and financial situation.