Are you looking for long-term accommodation but cannot decide if you should rent or buy? If you favour an apartment over other dwelling types you have already made the first decision, so all that remains is choosing between buying and renting.
Look at Both Sides of the Issue
Like every major life decision, there are pros and cons for both, but sometimes, people prefer to rent because they are not ready to commit to home ownership. It is helpful, therefore, to take a rational approach to the issue of renting vs. buying by examining both sides.
Pros of Renting – Flexibility
Apartment living for renters offers flexibility as tenants can move around to different locations whenever their lease expires. This is a great option if you have moved into a building where there are problem neighbours, or you are not ready to put down roots.
Fewer Upfront and Ongoing Costs
Renting is cheaper than buying with no large deposit required; it is just the standard bond and rent in advance. This enables tenants to choose a rental close to inner city locations to take advantage of the employment and lifestyle opportunities on offer. Also, there is no maintenance or ownership costs as these are paid by the landlord.
Cons of Renting – Uncertainty and Lack of Privacy
The biggest disadvantage to renting is uncertainty. Good tenants often have to leave locations that tick all their liveability boxes when their tenancy agreement expires and may have to settle for less suitable apartments.
They must allow their property manager or landlord access, by mutual arrangement, to their apartment several times a year for inspections. While there are laws that protect the rights of renters, the fact is they are not the owners and will always be paying rent without accumulating an asset.
Pros of Buying – Ownership and Stability
One of the pros of buying an apartment is that, although the entry costs are much higher than renting, and provided the mortgage payments are made, the home loan will eventually be paid off. This will leave the owner with an asset of substantial value.
Owners have the stability that renters do not and only leave their chosen location if they decide to sell or rent out the property. If they sell, they can buy elsewhere, or if they become landlords, they have an additional income stream.
Cons of Buying – Up Front and Ongoing Costs
Buying an apartment involves saving the required deposit and taking on a mortgage that must be paid regardless of life circumstances, such as losing your job. Home buyers are also responsible for ongoing costs such as insurance, rates, utilities and maintenance.
At Bunbury Real Estate we believe there are no right or wrong answers and both options are equally suitable depending on circumstances. Either way, we have the experience, market knowledge and professional staff to help people find their perfect home.