To rent or to own?June 26, 2020
Owning your own house had always been highly looked upon. The moment you get your brand-new house keys is always an indication that one has made it in life.
In times where median house prices have risen significantly, many people are starting to find that owning a house is a mountain too high to climb. Take this for example, millennials make up a big portion of homebuyers. With lifestyle and accessibility being important factors, they tend to look for housing options in the city center.
Unfortunately, unit prices in these areas are way above the average listings. New property launches in these areas would simply be unaffordable for most. With purchasing out of the question, they turn to renting instead. At the end of the day, it comes down to your current financial capabilities. Buying a home does not have to be a necessity if you think that you do not need one for yourself.
Let’s talk about renting first. The main reason why people rent units is due to the lower monthly commitment. In addition, rental deposits are far less compared to the initial payments needed to buy a house. Tenants will also be able to get the money back when they move out anyways.
Another reason why young people choose to rent is flexibility. As career opportunities evolve, relocation might be needed and renting ensures that flexibility to do so. It does come with a caveat as you are usually not allowed to make significant renovations to the unit as well.
Up to this point, everything seems to point towards renting. However, purchasing a unit may net you a few advantages too. By purchasing, you effectively own the property. While you are paying a higher amount every month, the property is yours by the end of the day. This means that you are able to sell it off by the end and make a profit if the appreciation value is high enough. You are also given complete control over how to renovate and decorate the house. Strata property owners however still need to comply with the regulations prior to any renovations.
In summary, buying properties is not going to get cheaper any time soon. The same property is going to cost you significantly more if you choose to purchase it a few years down the road. If you can afford it, buying one will give you greater returns in the long run.
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