To buy or to rent...?
Category General Information
To buy or to rent...? That is the question
It is an undeniable fact that property ownership in South Africa is one of the single most significant factors that contributes to individual wealth creation and long-term growth in private net worth value.
An investment in fixed property over the long term will almost certainly produce favorable financial yields that outstrip inflation, if carefully planned and executed.
Home ownership also provides advantages in greater stability and the flexibility to create your own desired lifestyle by making changes and improvements to your property as required from time to time, and as affordability permits.
Renting can also be an attractive option for some, and is a favorable for individuals or families, who require flexibility of movement and mobility.
Renting does not require a commitment for the long term, and many people with careers that require them to move regularly, will find renting an attractive option.
Renting a property can also provide a future prospective homeowner, with the opportunity to save for a deposit on their own home, and to use the time while renting, to investigate the market and make more informed choices regards their future property purchase.
While buying or renting a home comes with several advantages and disadvantages either way, dependent on personal circumstances, the financial commitments of either options are significant, and are most often the primary consideration in influencing the decision whether to buy or rent.
The costs of purchasing a property, extend to several areas, namely the transfer and attorneys costs in attending to the transfer, which are significant, and serve to extend the financial recovery point when the decision is made to re sell the property.
Interest on the home loan, property rates and taxes, building insurance, as well as general maintenance and upkeep of the property, all contribute to the expense base of property ownership, and these factors should be carefully established as best as possible, and planned for.
Author: Andre Blignault
