There is absolutely no denying that Sydney is a stunning place in the world. It is full of attractions, beautiful sights, and friendly people. For a long time now, being able to buy a home has been a big part of the Aussie dream.
While on one hand, renting is expensive and competitive in the current market, mortgage interest rates are higher than usual at the minute. When wondering whether to rent or buy in Sydney, you need to know that it will differ for everyone. Both owning and renting can have pros and cons.
On top of that, the option that suits you can change drastically. So, after this, you will have a good idea of which option could prove to be the best one for you.
How to Decide Whether to Rent or Buy
When you’re wondering how to decide whether to rent or buy in the Sydney area, the answer will be different for everyone. It will come down to what you value and the price you want to pay for it. Let’s take a look at some of the pros and cons to decide.
The Pros of Buying
First of all, let’s take a look at some of the pros that you can expect when buying when looking how to decide whether to rent or buy:
- You can renovate, decorate, and add anything you’d like to your home. This can make your home exactly as you want it and can increase value.
- You will own more and more of your property over time.
- You and your family will always have somewhere safe and familiar to call home for as long as you need.
- You won’t have to answer a landlord.
- Property investment in Australia is very safe and the value will likely increase.
- If you want to live elsewhere, you can rent your house out. This means that your tenant will essentially cover your mortgage.
The Cons of Buying
Now, to make it fair, let’s also look at the cons:
- It can take a large amount of time to save up a good deposit amount of 20%. You will also need to consider other one-off costs such as conveyancing fees, stamp duty, and lender’s mortgage insurance. Ongoing costs such as water rates, strata fees, and council rates must be considered.
- You will likely have the debt for decades.
- There is no guarantee that your property will climb in value as some areas can be hit with price falls. This can take a long time to recover from.
- You need to have money available to maintain your property.
- You may end up paying interest in excess of hundreds of thousands of dollars.
The Pros of Renting
When looking at how to decide whether to rent or buy, you need to take a look at the pros and cons of renting. First, let’s look at the pros:
- You don’t have to save up for a deposit.
- You can afford to live in areas that you wouldn’t be able to live in as a buyer due to the cost.
- Rent is often more affordable than mortgage payments.
- You can move very quickly.
- You’re free of a large financial obligation that lasts long-term.
- You won’t need to pay any body corporate fees or rates.
- You don’t need to pay for repairs most of the time.
The Cons of Renting
Now, let’s take a good look at the cons of renting:
- Many landlords often won’t allow any pets.
- You can’t do much to personalise or change the property. Even choosing to screw hooks in the wall can be banned.
- You are there with the landlord in charge and they might make decisions you won’t like.
- Landlords can regularly increase rent.
- There is no investment potential for you.
- Lack of security.
- If your landlord wants to sell, they can evict you with very little notice.
Should you rent or buy?
When wondering how to decide whether to rent or buy in Sydney, the info above can help you greatly. This decision will greatly depend on your life goals. It will also depend on what you’re comfortable doing and where you stand with your finances right now.
Sometimes your mind can be made up for you depending on the circumstance. For example, if you’re in your 20s, single and enjoying a fast-paced lifestyle, then renting is likely to be the best option for you so you’re not locked down to one location and don’t have to tie any cash up in an asset that you might want to use to spend on other priorities. On the other hand, if you have money saved up, are in a serious relationship, have kids or are happy with the neighbourhood you live in, then buying is likely to be the most suitable option for you which will provide you with long-term stability.
You can even begin saving for a home deposit while you rent. If you need some financial assistance, even if you have bad credit then you could find a loan that suits you.
If you are looking to rent or buy in Sydney and are considering applying for finance then talk to our friendly team at Bad Credit Loans today!