Why It's Better to Rent Than to Buy, Especially When You're Young
From an early age, people are told that they should always aspire to buy a home as soon as they can. It's a way of planting their roots and can give them a slice of the Australian dream that they can keep for the rest of their life. Certainly, there are benefits associated with buying a property, but there may also be a number of drawbacks, and more young people than ever are choosing to rent a house or apartment for the flexibility that gives them. What are the real benefits associated with renting?
Dealing with Life
If you take a mortgage out on a home when you are just starting your career, then you will be tied into significant payments for maybe 30 or more years going forward. It can be difficult to cope with these monthly payments if you encounter unpredictable circumstances, and you may find pressure on your living expenditure as a consequence. If you rent instead of buy, it's a lot easier to make changes to your life situation in this case.
Predictability
There's a lot more predictability to the world of the renter, as well. There are fewer unexpected bills associated with breakdowns, as the owner of the property is typically responsible for repairing those. Thus, if your fridge were to fail or your roof were to leak, you wouldn't have to dig into your pocket as a renter, but you would if you were living in your own home.
Changing Economy
The job market is nothing if not unpredictable these days. Very few people can expect to get a "job for life" anymore, and most young people will move from position to position as the economy continues to evolve. This can make it difficult to be tied into one property and can make it much more advantageous to rent instead. In this case, you will almost always be able to change your agreement after 6 or 12 months and can move to another part of the country, if you need to.
Investment Risk
The value of an investment can go down as well as up, and there is a risk associated with the value of your home. While the average trend may be up, you need to understand the risk associated with your deposit and mortgage payments. If you rent, you may be able to invest that money in another area with a higher potential gain.
Initial Payment
Finally, you don't have to find a significant amount of money to pay a deposit if you rent. Certainly, you may have to put down the equivalent of one month's rent for security, but this is a great deal less than the average required by a mortgage lender.
Making Your Choice
Look carefully at your house rental options before you think about buying a home outright.
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