Deciding whether to rent your living space or buy it is a choice at the forefront of many people's minds. What is right for you is circumstantial, and you need to evaluate your goals and current situation. Buying is not the right option for everyone, whilst renting space might not be the smartest choice for others. Let's break down the pros and cons of each, and which is best for what you want. Let's get started!
Advantages of renting
According to the Australian Institute of Health and Wealthfare, 31%, or 2.9 million households, were renters in 2022. And there are many different reasons why so many people are paying rent to landlords, even if this isn't their end goal. Some of the most common advantages and benefits are:
- Flexibility: One of the best things about renting is that it offers you the ability to move with ease. If you are not ready to settle down or anticipate a lifestyle change, you can meet your changing needs effortlessly.
- Predictability: Your monthly rental charges and utility bills are likely to remain the same because of your contract, which can help with budgeting.
- No maintenance costs: In most cases, the landlord or property management company will take care of repairs and other maintenance, saving you money in the long run.
- Taxes: When you don't own a property, you will avoid paying property taxes and stamp tax, an additional cost that some can't afford.
If you are unsure about your future, renting can actually be a smart choice as you prepare to settle down. Speak with your financial advisor about your personal circumstances and whether renting is a good choice for you.
Advantages of buying
For some people, buying a house is a smart investment in their future. There are some important ways to tell if you are ready to consider purchasing real estate. Here are some examples of how you could benefit from buying a house:
- Building equity: When you buy a house, you build equity which is very good for your finances. Your monthly payment will return to you in equity, unlike rental payments.
- Federal tax benefits: In some situations, you may be able to get some tax advantages. According to the Australian Taxation Office, "If you own the property for 12 months or more and you are an Australian resident, you may be entitled to a 50% discount on the capital gains tax."
- Acquire assets: A house or piece of real estate is commonly one of the average person's most valuable assets. It can impact your credit score and other financial standings in a positive way if you manage it correctly.
If you are ready to pay a mortgage each month and if your lifestyle permits it, buying a house could offer you many benefits.
Are you ready to find the perfect rental property or a potential new house? Reach out to the experts at Ray White Surfers Paradise today.