Though buying has its advantages renting is sometimes the better option. If you need to relocate regularly buying simply won't be sensible. Finding a buyer on short notice could force you to settle for a lower selling price and the costs generated by the transaction itself is a further aspect to consider. Furthermore renting means that you have less responsibility as far as maintenance is concerned, and if you have a busy lifestyle this is ideal.
"Renting offers you no equity and most likely no protection against regular rent increases."
Buying property is expensive and few buyers can afford to pay cash. If you don't qualify for a bond, renting is really the only way to go. Even if you do qualify for a bond you need a particularly sound credit record to lend more than 100% of the value of the property you plan to buy. Transfer costs, the deposit and bond registration costs can amount to a pretty penny which you will have to pay out of you own pocket. Lastly, it may simply be that you choose not to invest in property and prefer investing extra cash elsewhere.
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Why buy instead?
Though renting may be your only option and it means a nearly maintenance-free lifestyle, it has its drawbacks. Renting offers you no equity and most likely no protection against regular rent increases. Buying property remains a solid investment. The average home appreciates each year which makes buying a more financially sensible option.
If you get a fixed rate mortgage when you buy a home, you have the same monthly payment amount for a fitted period. Even if you get an adjustable rate mortgage, your payment will stay within a certain range for the entire life of the mortgage. When you rent a place to live, you can certainly expect your rent to increase each year or even more often. If your rent averages R 1 000 per month you will have spent R 120 000 in 10 years and have nothing to show for it apart from a landlord grinning like a Cheshire cat.
Another advantage that is closer to home, so to speak, is the fact that you have a place to call your own. You have the freedom to change and renovate at will and turning a house into your home is priceless.
If you get a fixed rate mortgage when you buy a home, you have the same monthly payment amount for a fitted period. Even if you get an adjustable rate mortgage, your payment will stay within a certain range for the entire life of the mortgage. When you rent a place to live, you can certainly expect your rent to increase each year or even more often. If your rent averages R 1 000 per month you will have spent R 120 000 in 10 years and have nothing to show for it apart from a landlord grinning like a Cheshire cat.
Another advantage that is closer to home, so to speak, is the fact that you have a place to call your own. You have the freedom to change and renovate at will and turning a house into your home is priceless.
