It is the eternal question – renting versus buying. The conclusion that is nearly always reached is that over a long period of time it is better to buy a house if you can rather than rent. If you are all set to give up renting and are off on the house hunt - check out our house buying guide for house buying tips.
We all dream of owning our own home but if your finances don’t allow it, your dream of a cosy bungalow in a leafy suburb may turn into a cold box on a main highway. Often, the standard of living you want for you and your family cannot be achieved by buying, so renting is the only way to go. This may be the only way of getting the location you want, the number of bedrooms you require, or getting into the right school zone. Not sure what you want in a house? We have some info and questions to help you get this nailed down in our 'what do I want in a house?' section - complete with a handy checklist that you can use to both make a list of 'wants' and also for a record of how a house scored when visited.
Many people consider rent as ‘money down the drain’ but the same could be said of interest on a mortgage… The success of your own home as ‘a good place to put your money’ really does rely on the house increasing in value over time. In a lacklustre property market, house values can stagnate for years, especially outside of the main centres. So renting could be a good option in these times.
Consumer have a handy renting versus buying calculator that you can use to work out the basic 'cost of paying a mortgage' versus 'cost of paying rent' question. If you are not sure how much you can borrow, talk your bank or a mortgage broker. Propertytoolbox makes it easy to have a free chat with a mortgage broker - head this way!
Renting means your house deposit is in the bank earning interest, and any other money saved can be added – the power of compounding interest will mean that you are going to see significant increases in your bank balance! To work out what you can save over time by putting your money in the bank - instead of into buying a house - check out this Sorted calculator - if you calculate saving all the money that would have gone towards paying for the mortgage and the cost of ongoing house ownership (usually a lot more then just your rent) you will be surprised at how this can add up over time!
Also if you are not sure you are in it for the long haul – for some reason you feel you may only own a home for a short period of time, or may move often – renting could be a sensible choice as there are significant costs to selling. Often selling uses up any monetary gains made by the house increasing in value if it has only been owned for a short period of time. If the property market has been flat - then you can easily lose money!
Maybe buying a house is not for you right now, but that does not mean that it is not in your future. Keep saving towards a deposit and keep an eye on the property market. When your circumstances, money, and the state of the property market suit your house buying goals - go for it!