Should You Rent or Buy a House?

The financial debate about renting and buying a house is an ongoing one which which still leaves many questions unanswered.

The point is this: Whether you are renting or buying you need to understand your motivations for doing either and then what the financial implications for either decision could be!

This article briefly touches on the financial implications of renting and buying a property.
Below I will outline both the advantages and disadvantages of both renting and buying a house.

Advantages if you rent a house

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  • Compared to market at time of purchasing your rental is relatively low.
  • You have more fixed costs for the term of your rental lease.
  • You won't gain equity capital in the house but neither will you loose any equity capital either while you rent.
  • When the rental lease is over you can choose to stay or just move!
  • Far less work in maintaining the property as your landlord/owner has to cater for this usually.
  • No large deposits (like when you buy) involved in a rental. A small deposit only required.
  • You can rent in a better area that you usually would not afford to buy in.

Advantages if you buy a house

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  • Over time your bond balance decreases which in turn means your payments also go down.
  • Generally you can modify and build on your house as you wish.
  • If you stay in the house for many years your house is likely to have appreciated a fair amount which means that you are "indirectly" saving through your home.
  • The proprotion of your repayments opposed to rental payment inflation means you land up paying less monthly over time.

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Disadvantages if you rent your house

  • You never make any capital gains on the house no matter how much it appreciates over time.
  • Limited options to personalize the house to your requirements.
  • No major advantages.

Disadvantages if you buy a house

  • Variable maintenance costs and insurances
  • House equity may go up or down or stagnate.
  • Moving means you must first sell the house.
  • Far larger capital outlay to buy a house.
  • Comparative to renting at time of purchase your monthly bond repayments are higher than rental prices.

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Yes, this is a pretty bold statement!

I have to back it up with something and I am going to show you how, but this means you will have to spend some time here. Therefore, if you really want to own a home using this powerful technique then you need to read further.

Read more about the Lease Purchase Training Course
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