Renting vs Buying – Which Is Better? | SA Home Loans

10 Jul 2020

Renting vs Buying – Which Is Better?

There are definite pros and cons of renting or buying property. As a prospective property investor, you’ll want to know what these are so you can make an informed decision, so we’ve listed a few of the top considerations below.




As mentioned above, if you can find a suitable place to rent, which allows you to save towards a deposit on a future home, then renting is a great option for the interim. This means you’ll take the difference between your rent and what you would be paying off on a bond each month (if you had one) and you’d invest it or put it into a savings account to grow or earn interest.

The downside here is having to wait on a landlord to do or approve any required  maintenance and repairs . They may not have the money (or inclination)  to pay for the fixes you want. 

Another positive about renting is that, as a tenant, you aren’t responsible for the upkeep of the property and any associated costs. You do need to take good care of the property and return it to the landlord in good condition, but you aren’t responsible for any big repairs.

Living in a property that isn’t yours means that you could be given notice at the end of the lease term about the non-renewal of your fixed-term lease. You’ll hopefully have enough time to find a new place to move to, but this means putting down a new deposit, as well as all the costs involved with relocating your household. The inconvenience here could be a lack of suitable rentals in your area, which means you’ll have to move further away from everything you know – including your kids’ schools, doctors and healthcare facilities.

The upfront costs for renting are relatively low. Once you’ve paid over your initial deposit, you only have to worry about covering rent, rates and levies each month. Your landlord will likely increase your rent each year, but this can be budgeted for and shouldn’t come as too big a surprise.

When renting, all your payments go to your landlord and you get nothing to show for your investment at the end of it. Effectively, you’re paying someone else’s bond

Buying a property



The long-term benefits of owning your own property include being able to build up equity on your home and growing your personal wealth over time.

Being a homeowner comes with financial responsibilities, such as paying off a home loan, seeing to the ongoing maintenance of your property, and paying insurance on your property. This means you’ll have to have all your financial ducks in a row before you take the plunge.

Your property can help you earn additional income. As a property owner, you have the option to rent your home (or a part thereof) to a tenant. Over the holidays, you can even Airbnb your property so it earns money for you while you’re away.

A property grows in value over time, but to realise an actual profit when you sell, you’ll need to own the property for a while. Property ownership, therefore, is a long term commitment and won’t suit anyone who enjoys a larger degree of flexibility.

By the time you’re ready to buy a home, it makes sense that you’ll want to make it your own. The great thing about owning a property is you can do what you like to the property. You don’t need to ask a landlord’s permission to paint a wall or make structural changes to the property. Your home becomes a blank canvas and you can do with it what you want.

You can use the equity on your home to apply for additional loans or lines of credit, which you wouldn’t be able to access otherwise.

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