Everyone knows that with renting a property, the renter will end up with nothing to show, even after years paying rent. The property buyer on the other hand, will end up with a substantial asset, initially taking on the commitment and expense of actually buying the property, but after mortgage repayments over years, this financial commitment finally comes to an end.
For many, the biggest and most important financial consideration is to buy their own home. In the past, buying one’s own home became increasingly frustrating and expensive. For those who can take advantage of the recent downturn in property prices, there has never been a better time to look for a home of your own.
Advantages of Renting
Buying a property is not for everyone of course and there are several advantages to renting.
Flexibility - in terms of moving for a job, renting makes a lot of sense, particularly if your job involves short stints in different geographic locations.
Cost - the cost of letting is much lower in the short term than buying. Usually a month’s deposit and a month’s rent in advance are all that are required to secure tenancy. Also, the tenant is not responsible for structural and other repairs. Therefore, the financial commitment of renting is easy to identify.
In addition, the renter takes none of the risks of the property market in good times or bad.
Buying A Property
it is long recognised that buying a property over the long term can make sound financial sense. Combined with a sense of ownership, buying a property can also provide security over the long term.
Overcoming the fear associated with the risks and cost of buying a property, especially your first property, can be difficult. Therefore analysing the opportunity and approaching it like any business problem may be helpful. Here is a quick guide:
1. Identify and write down all perceived risks and find solutions to overcoming these risks
2. Identify all the potential costs involved and decide how you will finance these.
3. Identify all of the benefits associated with buying a property
4. Decide whether you want to buy and if so, what you would like, where your preferred location is and when is right for you.
5. Look for a property that’s right for you, taking into consideration your current and future needs.