Page 82 - Q&A

Is now the time to buy or rent?

September 2020
“I have been saving for some time now with a view to buy my own property.
However, with all the upheavals of the last year I’m wondering whether buying
is still the right option and whether I should not continue renting. Any advice?”

Owning property can be very beneficial over a long period and property
generally is a worthy investment for your money. That said, it is not always the
answer for everyone and the rental market remains a good choice for many
when considering their finances, work situation and family size.
Currently, it is fair to say that it is a buyer’s market. Interest rates are low and
also weigh in favour of buying. But remember that buying property includes
additional costs that you will need to cover such as bond registration costs,
transfer costs, transfer duty to the Receiver, insurance premiums and even the
costs of renovating or upgrading your new property (if necessary). All these
Property costs can add up to a substantial amount for the first-time buyer. Likewise, interest
rates, although low now, can fluctuate over time and you need to have the
financial stability to accommodate such fluctuations and the other associated
costs with owning and maintaining a property.

In comparison, renting can be a far cheaper and, in some ways, simpler and
more flexible option for many. That said, by renting you are helping the landlord
pay off his mortgage and increasing the value of his investment and not yours.
You are also at the mercy of your rental agreement in respect of what you
can and cannot do with the property, and you could even be given notice
to vacate the property should the landlord decide to sell (subject to what the
rental agreement says, of course).

So clearly there are pros and cons to buying and renting. It is therefore useful to
consider the following factors when deciding on which option may be better
for you:

• How long do you plan to live in the same place?
• Compare the costs of renting vs buying.
• What is your view on your financial position going forward?
• What will your space needs be in a few years? (family, pets, cars etc.).
• What are the risks for you in buying or renting?
Although there could be many more factors to consider, these considerations
should give you a good idea of whether buying or renting is the correct route
for you.

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