select
|

Buying vs Renting

Should you rent or buy a residential property? It all depends on where you are in life, according to Paul Stevens, CEO of Just Property, who says that making the correct choice is entirely dependent on ones stage of life, financial situation and personal circumstances.
 
“Many South Africans aspire to own homes, feeling a sense of pride in their property and preferring to pay off their own bond rather than paying rent. Others favour renting a property because they may not be able to afford a deposit on a home in their current financial situation, or they find renting more convenient to their particular lifestyle. The choice of whether to rent or buy really is a matter of individual preference and circumstance,” observes Stevens.
 
Stepping stone


The residential property market is of course subject to the economic vagaries of the future. Purchasing a well situated home is therefore critical and this remains a sound long-term investment. Indeed, the well placed home can prove to be remarkably ‘recession proof’ in tough economic times.
 
For large numbers of South African families and individuals, the allure of owning a property of their own is irresistible. Purchasing a home allows buyers to immediately enjoy the lifestyle benefits on offer and to develop the property according to their own particular tastes. They can invest time and resources into the home secure in the knowledge that are investing in developing their own particular property.
 
Many use their first home as a stepping stone into the property market and then progressively ‘buy up’ to larger properties as their financial situation strengthens and their life priorities change, as they start a family and so on.
 
Among the many other benefits of owning a property is that once the individual owns such a substantial asset it can be leveraged at a later stage in order to raise funds for a larger or more expensive home. This underscores the importance of purchasing the correct home.
 
The importance of location

We would advise the first time buyer to rather seek a modest property in a suburb where homes have historically held their value well, as opposed to buying a larger home in an area where home values may be less stable.
 
Fortunately, there are a myriad property purchase opportunities in Gauteng and there are large numbers of excellent apartments and sectional title homes available for the first time buyer. We also note that many of today’s estates and upmarket mixed-use developments are including a sectional title component, which makes them more accessible to the first-time buyer or younger professional.
 
The buy to rent investment


People often decide to keep their original property as an investment when they move on to a bigger, family home. This can provide them not only with capital growth over time, but also good rental returns, which may assist them to settle their bond. Some investors go on to purchase a number of properties from which they derive a regular income.
 
The rental option 

As noted above, the rental option remains an alternative to those who are not able to afford to purchase a home. It should be noted that, in the short term at least, renting a home is cheaper than buying, as the renter does not have to invest in deposits, transfer duties, bond repayments and other costs. The owner is also usually responsible for rates and taxes, insuring the property, as well as maintenance and repairs.
 
Others appreciate the greater flexibility that renting may infer; it being easier to give notice on a lease rather than sell a home in order to relocate. This makes the rental option more appealing to contract workers who find they often need to relocate or those who wish to defer making a major financial commitment at their particular stage in life.
 
Renting may also be the preferred option for people who have relocated to a new city or to expats who are returning to the country after some years as it allows them re-establish themselves before making major financial commitments.”
 
In summary, the decision to purchase or rent a property is determined by the individual. Whether buying or renting a home, it is important to do some research and make decisions that are right for you. A trusted property advisor specialising in both these fields should be able to assist you to find a property that is appropriate to your particular life situation,” concludes Paul Stevens.
 


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
    • 14 Feb 2018
      While you may not have intended to place your home on the market, what do you do if you receive an unexpected offer on your home? In areas where demand outweighs the current supply of homes available to buyers, it is not unheard of to have buyers make offers on homes that aren’t on the market, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      If you are looking to sell your home this year, Debbie Justus-Ferns, divisional manager of Renprop Residential Sales, says that there are five crucial things to do before the ‘for sale’ sign goes up.
    • 01 Feb 2018
      February is the month of love and to celebrate we will be posting about all the things we love this month. Follow the #MyPropertyLoves hashtag to keep up with our favourite things.
    • 01 Feb 2018
      After saving up and months of searching for the right home, applying for a bond and patiently waiting for the keys to the front door, it is finally time to cross the threshold and move into your new home. Now what?
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK