Home ownership offers a whole lot of advantages, but it so does renting a property. Quite frankly, home ownership is not for everyone. So, lets look at a few compelling reasons to rent a property, rather than buying.
Personal Needs
As with owning a property, your personal needs will play an important role in the decision to rent a property. If renting suits your specific needs better than owning a property, then it would simply make sense to rent a property, instead of buying.
Some people need to be able to relocate regularly and be free to do so at short notice. If such a person has to sell a property every time they want to relocate, they will have to deal with the uncertainty of finding a suitable buyer for their property in time, every time. This could mean that they have to compromise on the selling price for their property, in order to meet their time constraints.
Selling a house at a reasonable price can take time, which these people don't have. So, in order to sell the property, the owners might have to accept a reduced offer price.
Home ownership also involves other responsibilities that some people might want to avoid. For instance, property owners need to maintain their property, while this responsibility is the landlord's, if you rent a property. So, people that don't have the time for home maintenance, or people who don't want to deal with the uncertainty of maintenance expenses, may find that renting suits their personal needs better.
Personal Finances
Buying and owning a property can be an expensive exercise. Very few buyers can afford to pay cash for a property, and if a person cannot qualify for a sufficient mortgage bond, they might not have any other choice but to rent a property.
Buying a property can require a rather big amount in cash. There are the transfer duty payment, the conveyancing fees for the transfer, the bond registration costs, etc. A person will usually need an exceptional credit rating to be able to qualify for a mortgage bond of more than 100% of the purchase price, so these costs of buying a property would have to be paid in cash.
The mortgage lender may also require a 10% deposit (of the purchase price for the property), to ensure that their risk is sufficiently covered.
Some people may also find that having their capital invested in a property is to their disadvantage. By choosing to rent a property, rather than buy, they can have their capital readily available for other uses.
In the current property market, the monthly mortgage bond repayments for a property, combined with the property rates and taxes, homeowners' insurance premiums and maintenance expenses are often considerably higher than the rent charged for a similar property in the neighbourhood. So, for those people who cannot afford these payments, renting a property is often a viable alternative to buying a property.
Why Rent A Property?
There are definite benefits to renting a property. And each person has to decide for him/herself which option suits his or her specific needs and situation best.
