To buy or to rent: weighing up the options

The choice of whether to buy your home or rent it is one to which there are no right and wrong answers. The right decision for you will depend on what stage of life you're in, what your finances look like and what your plans are. To make the decision-making process easier, the CSi Property Group weighs up the options.

Homeownership: an investment in your future but also a responsibility

The biggest advantage of buying a property is that you're paying off an asset that you'll get to call your own one day, rather than paying off an asset on behalf of your landlord. There's also a great sense of pride in being able to call your home your own. Knowing that you don't have to ask anyone for permission to paint a room or drill a hole in a wall is immensely useful if you want to renovate or improve your living space.

However, as an investment, a property purchase only makes sense if you're going to own the property for several years. If your goal is to relocate from Gauteng to the Western Cape in the next three years, buying property may not be the best way to invest your money. It's also important to understand that as the owner of a property, you will be responsible for expenses that tenants don't have to worry about. These include rates, levies, homeowners' association fees and the like.

Another factor to consider is that if you were to decide to sell your property, there are significant costs involved, such as conveyancers' fees, estate agent's commissions and the cost of various inspections that must be carried out before you can sell. In a nutshell, homeownership is an investment in your future, but one that comes with significant responsibilities.

The impact of a changing interest rate

The South African prime interest rate made headlines in July 2020 when it reached a 50-year low of just 7%. This has made it possible for more South Africans than ever before to become homeowners, but would-be buyers need to remember that interest rates fluctuate, and that in time, their home loan repayments are likely to climb if their loan is linked to the interest rate. With that said, tenants face annual rental increases that are likely to cost more than a jump in the interest rate will cost a homeowner.

Renting: flexibility for an on-the-move lifestyle

If you're unsure of where you want to settle, do not want a long-term commitment or you're thinking of emigrating or semigrating, then renting is probably the right option for you. The advantages of renting include not needing to worry about maintenance costs and repair bills. Renting may also be the right answer for those who haven't yet had the opportunity to save up a sizeable amount to put down as a deposit to buy a home. Having a deposit when you decide to buy is a huge advantage, as it makes the banks look favourably on your application for finance and lowers your monthly bond repayments.

If you're renting in one of Gauteng's many gated complexes, you get free perks (paid for by your landlord) such as 24-hour security and access to a pool and walking trails. As a tenant, deciding to move to a different suburb or city is far less daunting than it is for a homeowner. You don't have a property to sell - all you need to do is provide your landlord with notice that you won't be renewing your lease, and you're free to start looking for a new home.

Whether you decide to buy your home or rent it, the CSi Property Group has a listing in Gauteng, Limpopo or Mpumalanga that's just right for you. Contact us and let's find your ideal home.