We always seem to think that owning a home is better than renting. And if you are renting, you have at some point thought “I am paying my landlord’s bond repayment” and you’re not wrong. However, it may be interesting to find that renting has its own unique advantages over owning a house.

If you are still renting, great and if you own your own apartment/home, even better. But if you are in the process of deciding, have you truly considered every aspect of renting vs owning your own home?

So to break it down, here are the pros and cons of renting vs owning your own home. 

Here are the pros and cons of owning your own home:

1. According to Property24, there are long-term benefits such as security and potential growth in personal wealth
2. The value of the home is likely to appreciate with time
3. You have the ability to renovate your home and make it yours
4. You have the option to rent it out and generate an additional income;
5. Increase your credit score, if you take out a bond and make your repayments on time. 

Now, what are the cons of owning your own home?

1. It’s a long-term financial commitment with a bond repayment & maintenance
2. The potential risk of not making any profit when you decide to sell the property
3. You will have less flexibility to move and;
4. Additional costs each month such as rates and taxes on the property

Doesn’t sound so bad? Well, let’s take a look at the pros and cons of renting a property.

Pros of renting a home

1. More flexibility if you decide to move.
2. Living in an area that you could potentially not afford to buy in.
3. Your landlord will be liable for most repairs and maintenance
4. As a tenant, you will only need insurance to cover your personal contents and;
5. Paying rent will allow you to potentially save money, invest and diversify your financial portfolio.

The cons of renting a home:

1. You cannot make any changes to the property without the consent of the homeowner
2. The tenant will be bound by the rules of the lease agreement
3. If you are renting a property, you will be bound to fluctuations of the rental price and
4. There is zero wealth creation as you are paying towards the owners bond repayment. 

So, what do you do next?

Well, that’s completely up to you. It’s important to note that at the end of the day, the decision will be yours to make. With reference to Renterverse, renting offers you and your family great flexibility in your lives. However, it does not provide you with full time security that owning a home would. 

Why would you not qualify for a home loan?

In the event of not qualifying for a home loan, it can be due to a few factors. Things such as credit score, affordability and level of in-debtedness are taken into account. Having large amounts of debt, arrears on accounts, defaults and judgements will impact your credit score. If you are considered to be too risky your home loan application will get rejected.

A financial institution has to ensure that you are able to pay back the home loan before granting it. This is why there is a vigorous application process. To find out ways on how to improve your credit score, speak to a debt expert.

Can debt counselling block you from buying a home or renting?

According to Nick Bompani, you are still able to rent a property. Most agents and landlords are able to do a credit check if you apply to rent the property. However, if you are currently looking to buy a property whilst under debt counselling/review through a home loan, you will have to pay off all existing debt in order to apply for a home loan.

What can I do to rent a property under debt counselling?

In order to rent a property whilst under debt counselling, you may ask your debt counsellor to provide you with a proof of budget that proves that you have the affordability to pay the rent each month. Additionally, you may offer surety with another person co-signing on the lease agreement. 

We can offer you debt solutions to help you manage your debts, consolidate payments and make them more affordable for you. Contact us for more information.