Benefits of renting vs owning

Benefits of renting vs owning

Private Property South Africa
Private Property Reporter

Social media is often buzzing with property debates, with some stating that rent is a waste of money and that rent money should rather be put towards paying a mortgage and owning your own space. While this may appear to be true on the surface, there’s more that goes into owning a home that many people aren’t privy to. Here are the pros and cons of renting vs owning a property:


Renting is beneficial in the short term because it is a great option if you don't have the finances to purchase a home. Buying property comes with a lot of hidden costs and renting allows you to pay less than you would if you were a homeowner, which can help you save, invest and pay for other expenses.

Another advantage of renting is that it allows for flexibility. It is a great option if you’re planning on staying in an area for a short amount of time. Should you need to relocate or lose your income, all you have to do is give the landlord notice and it will have no bearing on your financial records. It will also be easier for you to move as compared to a homeowner, because you aren’t responsible for the mortgage, homeowner’s insurance and maintenance of the property.

Renting allows you to also access areas you would have otherwise been unable to afford if you had to buy a property, giving you access to a higher standard of living at a lower price.

The disadvantages of renting are that you’re leasing someone’s property, so what they say goes. Anything written in the lease agreement should be adhered to by law.

When renting, your money goes towards the landlord’s mortgage, meaning you aren’t building any assets of your own. In the long run, this can prove to be detrimental if you wish to create your own wealth and investment portfolio. Furthermore, it’s difficult to customise or renovate a rental because the landlord will have to sign off on any changes you’d like to make.

Rent also tends to increase annually due to inflation and in addition to this, rental disputes can be difficult to solve.

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Owning a property is a great way to build equity and grow your investment portfolio. You can sell your home for more money than you purchased it for in the future, giving you a return on investment. Due to the fact that you’re a homeowner, you are allowed to make renovations and customise your home as you please without consulting anyone prior. Having your own home gives you greater privacy and allows you to set the rules. This also means there won’t be any disputes with a landlord, because you are the landlord.

Unlike rent which increases yearly, a fixed mortgage rate means you’ll have an idea of how much you’ll be paying towards your bond monthly. Owning your own property also gives you a sense of stability that renting doesn’t, as homeowners often live in the same home for years before deciding to move out.

The disadvantages of homeownership are that you have less flexibility with regards to moving, so you can’t just pack up and leave to another city or country without immense consideration. Added to that, you need to have money for your deposit as well as transfer fees, bond registration fees, homeowner’s insurance, home inspection fees and possibly, renovation fees. Having liquid capital is recommended for any hidden costs that may pop up along the way.

Maintenance also falls on you, so if something on the property needs to be fixed, you need to make sure that you have the money to fix it. It also takes years to build equity using property and there’s a risk of the housing market crashing, which will affect your investment negatively.

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It’s important to keep all these factors in mind prior to making a decision to rent or own a property. Each choice comes with its own set of advantages and disadvantages, but the phase you’re at in your life combined with your personal finances will help you determine what the best choice for you is.

Read: South African suburbs with the lowest rent


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