News And Media

Rent or Buy a Property?

Thursday, March 26, 2015 | Gerard Caruana

                                                                                                    

It's a debate that has been going on for years. Should you rent a family home or buy one? 

 

There are supporters of both propositions but obviously it really comes down to personal circumstances. Young couples just starting out are likely to have to rent until they can accumulate enough money for deposit on a home.

 

Of course if you are in transit you may not want to commit to buying a home until you know where you are likely to settle. So, you are likely to rent under those circumstances.

 

Supporters of renting instead of buying say that you can put aside the difference between the mortgage payment, plus rates and other maintenance costs of a property and put it into an investment.

 

This presumes that you will always have the discipline to put aside the difference. It also presumes there will be a difference between the mortgage and the rental payment. We all know that rents will vary according to the supply and demand situation and where you want to live.

 

The popular locations are always going to cost more to rent and there is always the possibility of future rental increases based on trends in that location. Still it is still an option that may work for some.

 

On the other side of the debate supporters of buying a home point to the need to create a family home in the long term for family stability where there are less outside influences out of your control.

 

In most circumstances I would advise a young family starting out to try to buy a home as soon as possible even though saving the deposit might seem daunting. It may be a case of starting out with a modest home in a less expensive location and gaining as much equity as possible to enable trading up at some future stage.

 

There are young couples who will buy a home and rent it out while they stay with family to give them base to start from. It's a good idea to get advice on some of these options and make up your own mind as to the best option for your own personal situation.

 

But generally I like the idea of getting a foothold in the market particularly in Sydney, the Central Coast and Newcastle regions.

 

Another consideration is when you getting close to your retirement years and you own a home you have a lot more options for your retirement such as downsizing and creating funds for other purposes such as travel, helping family members and so on.

 

If you have been renting throughout your life and you haven't been able to save the difference between rent and mortgage payments, then you are not in as good a position as you could be.

 

Many families we deal with take the buying option even further. They build a Wincrest home and when they have reasonable equity in the home they build another home as an investment property to rent out using some of the taxation advantages available.

 

I think it is a particularly good time at the moment, with interest rates at low levels, to build a brand new family home or invest in a rental property.

 

But as I said before you need to assess your own situation and the needs of your family and seek financial advice before making a decision whether deciding to rent or buy.

 

You're always welcome to come and talk to our team at one of our display centres about the home designs we have and about our famous design flexibility.

 

More news soon.
Gerard Caruana

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