Tips to help you decide whether to rent or buy

Purchasing a home is as much an emotional decision as it is a financial one. From my personal experience, it’s crucial to feel you’re in a place in your life where buying just makes sense.

While renting and buying can both be good options depending on your circumstances. I tend to believe people underestimate the benefits of renting and the hassle of owning because they are hardwired to do so.

Maybe you're currently renting and are thinking about buying your first home. Or maybe you're a homeowner and you are thinking of buying a new house or apartment. If you are not sure whether buying again or renting is the right move.

However, because everyone’s circumstances are unique, there is no one-size-fits-all answer to this question. It’s essential to weigh up the pros and cons of buying a house as it’s a monumental decision that could affect you for a extensive time.  Here are some tips to help you decide whether to rent or buy.

What are your reasons 

Like most people I was raised to believe that owning my own house meant success and buying meant I was progressing, basically I was adulting the right way. Renting is often seen as a form of immaturity, like you don't have goals and you are not going anywhere in life.

It's the same as people who believe that owning a flat and owning a house with a garden and a pool determines the type of person you are. If you don't know how to swim or even work that garden, what are they for?

Before you commit to buying, it's vital to note why you're doing it in the first place. If you're considering a home purchase to appear successful, you're setting yourself up for failure. It's essential to look at the pros and cons of renting and buying for what they really are.

Can you afford it?

Making a choice between buying and renting a home can be difficult. However, your decision might come more easily if you consider your existing lifestyle needs, your financial stability, and the price to rent or buy in the city in which you intend to live. Next, you need to make sure you can afford to pay costs like utilities, maintenance, furniture, taxes, and inevitable surprise costs like emergency replacement of the broken boiler. Also expect your bills to change on a monthly basis. The most prudent thing you can do is educate yourself. If you don’t do your research, making the wrong decision to buy could really set you back financially.

Compare locations
While buying a home is often less expensive than renting, the opposite is true in certain areas of the country. Housing markets in major cities are often far more competitive than those in small towns or rural areas. Currently, some housing markets are booming and others are stagnant, while in some cities rents have taken off, in others they remain as low as ever. The Knight Frank Global Residential Cities Index which was released last year revealed that property prices in Cape Town and Johannesburg are getting more expensive. Cape Town took number 31 on the index with an 8.4% annual house price growth. Johannesburg registered an annual house price growth of 3.2%. Check all of the numbers for the neighbourhoods where you want to live.

Freedom vs responsibility

With owning your house, half of your salary is going to go to your home-loan and you are tired that house for a number of years. On the other hand, renting gives you flexibility if your circumstances change. If you find yourself with less money, you can move somewhere that offers a more reduced rent.
The most attractive thing about purchasing your home is that you have complete freedom over the property to do with what you will. Another thing is you might not be able to buy in your favourite location but renting there might be within your price range. Renting can make a lot of sense depending on where you are in life. And just because you can buy, doesn't inevitably mean you should. Trust me, it's much better to rent while you determine what you genuinely want in life than to buy and learn the hard way.

As you can see there are pros and cons to each decision, and as your situation changes your needs will shift. If you are currently faced with the dilemma of whether to buy or rent, it’s worth thinking about which option’s best for you.

Are you a homeowner or are yo currently renting?