Renting or buying a home is a big decision that requires careful consideration, especially in the current South African economy. The problem is, there’s simply no right or wrong answer, which can be confusing if you just want to know what to do next.
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The reality is that it’s only once armed with all the relevant information that you can avoid financial woes and make the correct choice for you.
We highly recommend that you weigh up the pros and cons before you rent or buy property today.
Compare The Pros And Cons Of Renting
| Reasons To Rent | Pause For Thought |
| Enjoy the flexibility to easily move without having to sell up – which is especially important if you’re unsure about your future plans or need to relocate frequently for work. | As a renter, you can’t build equity in your home, as you’re not financially investing in a property. |
| Undeniably lower upfront costs, because renters typically only need to pay a deposit and the first month’s rent, while homeowners need to cough up for a deposit, transfer fees, etc. | Renters have limited control over the property and must abide by the landlord’s rules and regulations, which can be frustrating if you want to make changes or personalise your space. |
| Renters aren’t responsible for maintenance costs, saving you heaps in the long run, especially if you’re renting an older property that needs more help as the years go by. | Rental payments tend to increase yearly, with landlords opting to both increase the rent annually and at the end of your lease period. This can make it difficult to budget for the future. |
| Depending on where you rent, you could enjoy access to great amenities, like a swimming pool, gym, or clubhouse – without the added cost of ownership. Amenities that you don’t have to pay for. | You’re only guaranteed a home for as long as your lease stipulates. The landlord may decide to sell the property or move in themselves, so you could end up feeling rather nomadic from one lease period to the next. |
A Review Of Whether You Should Buy
| Reasons To Buy | Pause For Thought |
| Buying property is an investment, allowing you to build equity over time and even benefit from any appreciation in the property’s value. | Buying a home requires higher upfront costs than renting a home, including the need to pay a deposit, transfer fees, and other closing costs. These can be a significant financial burden. |
| Buying property can also be a huge opportunity for diversifying your asset portfolio. | The profits gained when selling property aren’t guaranteed, for instance, if you haven’t owned your home for long enough to have accumulated much capital growth. |
| Homeowners have complete control over their property, which means that you can make changes and personalise your living space as you see fit. | As the homeowner, you would be responsible for maintenance costs, including repairs, renovations, and upgrades to the property. These can be enormously expensive to deal with. |
| There are no rent increases or the possibility of being evicted to be worried about, which can be especially important for families who want to provide a stable home environment for their children. | You have significantly less flexibility than if you were to rent, given that you can’t simply move to a new location without first having to sell your property. |
| If you decide to move in the future, you have the option to rent out your property. This can provide a steady stream of passive income, and with the right property in a sought-after location, rental income can be quite lucrative in South Africa. | Due to the ever-changing socio-economic climate and unprecedented events, the location of your property and its surrounding areas may decrease in demand and bring your property’s value down. |
Feeling Informed?
While we trust that this information will help you figure out whether it’s better to rent or buy a home in South Africa, ultimately, your decision should be based on a careful analysis of your own personal finances, lifestyle, and long-term goals.
One tool that can be particularly help as you weigh up whether to buy or rent, is our Free Property Report. This way, you can gain insights that will help you understand more about any potential homes you’re interested in purchasing.
Click here to get a free property report – and don’t forget that AA Inform is home to a range of useful tools and resources – including our Home Affordability Calculator which will give you an estimate of how much you can afford.
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