Renting vs Buying?
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Should I rent or buy? This is one of the biggest hurdles many 1st Home Buyers face when looking at their options when deciding if it’s a smart decision to buy a home or continue renting. To save you hours of painful browsing and reading, I’ve compiled a list of Pros & Cons for both scenarios with some Case Studies to illustrate “unusual” scenarios & how they may affect you…
Benefits Of Buying Property
- Increased tax benefits, negative gearing deductions, property depreciation over renting 1
- Become a landlord with 1 easy step & have the ability to generate additional cashflow from renting 1 or 2 of your new homes spare rooms.
- Buy with another party if you can’t buy on your own. Take advantage of capital growth and suburb growth benefits, while benefitting from reduced risk of buying individually
- Interest rate cuts usually lower mortgage repayments, this in turn increases your avaialble income. Does your current landlord lower your rent at every rate cut?
- Capital growth secures your future, this is a proven strategy as seen by many baby boomers (your parents) who are completely debt free due to capital growth.
- If you buy a property with development potential this is a long-term investment strategy not a get-rich-quick scheme.
- Avoid outragous landlord rent rises! The current interest rates on offer in Australia are the lowest in history. Securing a property now, you will not find a better opportunity.
- Purchasing a property has many long term benefits, such as low rate secured personal loans and low rate secured credit cards, saving you on interest and fees every day.
- Paying a property loan improves your credit rating over time allowing financial firms to provide products and services not obtainable by others with bad credit ratings.
- The equitiy obtained in your property long term can be used to offset investnments in other areas, such as business, vehicles, other property purchases, loans and shares.
- During the last 25 years the average house value in Perth has risen by a huge 412%. Having grown by an annual rate of 6.8%, according to a recent CoreLogic report presented by Aussie. The report can be found here.
- Buying a new property allows you to build equity while only paying a small amount for the deposit. You get 100% of the capital growth on the property even though your deposit was only 2% of the property.
- A mortgage is a form of forced savings so you don’t have to discipline yourself