Should you be a buyer or stay a renter?


There is a lot of talk in the market at the moment. Everyone is hearing these words, Buy, Buy, Buy- but very rarely do you hear the words Rent, Rent, Rent. Australia's fixation on negative gearing, something to surely be addressed this year has meant that from a young age, Australian's are taught to buy, never rent, as rent is venom for your future goals. It's a unique approach, with places such as Europe taking on an entirely different sentiment. Today we wanted to put together two Pros for being a buyer or a renter. Read Below. 

 

Pros for being a Renter:

 

  • Lifestyle- There is so much for looking at rent as an expense. By looking at your rent as being an expense it is always changeable and generally at a rapid rate and not as reliant on market demand. With rental agreements you agree to your lease and then when it finishes both parties can go their own way. Whilst you can exit a property purchase, the process and heavy reliance on the market and recouping your investment can be a strong predicament that buyers face.

 

  • Money management- By renting you give yourself the possibility to look at your investments on a more holistic level. When people buy properties, it isn't uncommon for their entire investment to go to one asset which they rarely can alter. By renting, you can use the excess money to diversify and try new investments. Property is just one investment opportunity, shares, businesses, and many other investment options are out there if you choose not to put all your money in to a mortgage. 

 

Pros for buying property: 

 

  • Negative Gearing- You probably hear so much about this but may ask what do I actually gain from negative gearing? This form of investment allows you to offset the loss you make when the return does not exceed the expenses for holding the property. You are able to write this loss off as a tax deduction decreasing your taxable income. 

 

  • Tough regulations protect the market- The Australian market makes sure that there are tight restrictions to prevent situations like the US mortgage crisis. Not everyone can get a mortgage and when you do take out a mortgage you are subject to strict regulations and repayment structures. Whilst this can make it tough to get in to the market, it does ensure that when people take out mortgages they are in a position to finance them. By having fewer defaults on investments it continues to drive prices up and increases the strength in the market. 

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