The white picket fence (and the two and a half kids) can feel like an urban myth. With the price of property increasing and banks requesting bigger deposits, it’s got a lot of people weighing up the property renting vs. buying debate.
We’ve all heard the saying, rent money is dead money but, with the cost of property in the Adelaide Hills (and the greater Adelaide area) increasing, it begs the question: should I rent buy a house or rent?
Let’s go through some of the pros and cons in today’s environment. Looking for a house to rent or a house for sale in the Adelaide Hills is a nuanced question – there’s no right or wrong, only what’s best for you.
Renting a property
Flexibility is favourable these days. Unlike the decades before, when we lived in the same house year after year (and worked in the same job), people want flexible lifestyles more today.
Renting can certainly offer this. You’re locked into a yearly lease instead of a 30-year mortgage. Your monthly expenses will be less, too, because you’re not spending thousands on mortgage repayments. Is travel or extra study calling out to you? Maybe it’s the time to do it while you’re renting.
Renting also allows you to diversify your investments. If you don’t like the idea of having your assets tied into a single investment, renting lets you sprinkle them across opportunities like shares or bonds.
The cons? You’re not paying off the house you live in, unlike buying. In 30 years when your friends own the house they’ve paid off, you’ll still have that monthly rental expense. Without an asset to show for it.
Buying a property
There’s the stamp duty, conveyancing, building insurance, inspections, maintenance costs, local council rates, water bills and strata fees. Oh, and the bank’s hefty interest rate. Investing in property is a lifelong commitment. It’s more than just saving up a deposit. There’s ongoing costs that you can’t escape. But, that property will be yours.
Say goodbye to landlords, quarterly inspections and that feeling of not being in control. You’ll start to love words like ‘equity’ because they actually apply to you. In time, the equity of your home increases which can be used to fund other investments, like shares or managed funds.
But there are cons, too. Buying a property means paying interest. And a lot of it. Be prepared for those rates to fluctuate over time.
So, is it better to buy or rent a home? The answer will be different for everyone. But overall, if you are disciplined and can afford it, buying a house for sale in the Adelaide Hills is better. This property becomes an asset that builds financial freedom in the future. Timing also plays a critical role and its capital gains. A well-timed house purchase is everything. If you can sync this, house prices going up becoming a good thing.