Pivotl - Issue 4-2023

PROPERTY MATTERS
To buy or to rent …
Buying a home and renting
a home both have their
own advantages and
disadvantages. If you rent, you
have more money available in
the short term, but if you buy a
house, you get a sense of
security as it is considered a
long-term investment.
Advantages of buying a home
include:
Owning a home offers longterm
benefits such as
security, equity, and potential
growth in personal wealth.
The value of a home will
appreciate over time, which
means that if you decide to
sell, you can make a profit off
the sale.
You have creative control of
your property, so you can
make changes to suit your
needs and style.
You can generate income by
renting out the property and
this income can be put
towards your home loan.
Paying your bond
repayments on time
increases your credit score.
You can refinance your bond
amount should you wish to
withdraw a large amount of
money to pay for major
purchases.
There are possible tax
deductions related to incomegenerating
properties.
Disadvantages of buying a
home include:
You have huge financial
responsibility, including bond
repayments and regular
house maintenance.
There are additional costs such
as rates, taxes, insurance, and
maintenance for which the
Homeowner is responsible.
You run the risk of not
making any profit through
resale if economic factors
such as a recession or high
interest rates affect the
market.
You have less mobility when it
comes to being able to move
home than a Tenant who
rents on a short-term basis.
Advantages of renting a home
include:
Renting a property allows
more flexibility than owning a
home, which is ideal for those
who could be faced with
sudden changes such as a job
relocation.
There is the possibility of
living in an area in which you
could not afford to buy.
Moving out is easier for a
Tenant than a Homeowner as
there is no stress of finding
someone to take over the
lease or finding a buyer to
purchase the property.
The only insurance required
by a Tenant is to cover the
contents of the home.
Disadvantages of renting a
home include:
You are bound by the rules of
the lease agreement, which
can impact the freedom to
use or renovate the property.
You cannot make changes to
a rented property without the
consent of the Homeowner.
When renting, you will often
have to deal with a Rental
Agent who will then be the
liaison between you and the
Homeowner.
Renting offers no wealth
creation or return on
investment, and you have no
control over annual rental
fluctuations.
There is no guarantee that a
lease will be renewed when it
expires. n
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Issue 4 - 2023