Buying a Home, is it Cheaper to Rent or Buy?
June 13, 2019
Buying v Renting
There are many advantages to buying your own home rather than renting. These include:
- Paying off your own home rather than someone else’s. “Rent money is dead money”
- Buying gives you more control and freedom
- Design your own home
- Make additions and renovations
- Have a dog or cat
- Put up pictures
- Be able to do landscaping and gardening
- No landlord inspections
- Avoid the property being sold
- No bond or bond refund arguments
Is it Cheaper to Buy or Rent a Home?
We asked Brendan Styles from C-Finance Brokers the question, is it cheaper to rent or to buy a home in the long-term? Brendan has worked with many people looking into buying a home, both at North Harbour and elsewhere, and is an expert mortgage and financial advisor.
Brendan: “Firstly, the rent or buy a home question mostly affects first home buyers or those that have just sold up and need flexibility for life and investment choices.
If you are currently renting in the northern suburbs of Brisbane for an average of $380-450 per week, it is cheaper to rent rather than buy a home. However this simple cost comparison only compares one variable out of several and if you are looking to move into ownership, there are three key things to consider:
1) Now vs the Future – “Pain vs Gain” – How willing are you to make sacrifices in the short term, for a long term benefit?
The day to day of renting may be ok for now, however if you continue to rent then you cannot benefit from capital growth as you would with buying your own home, or an investment property. You will experience rent increases each six months…and every $15 per week increase in rent is the same as a .25% increase on a $350K mortgage. Now that’s an interesting statistic…we cry poor when the bank increases interest rates, but we can’t do anything about a rent increase.
2) Security & Control. Most of our first home clients value this, almost as equally as the cost equation. We do get sick of being told what we can and cannot do, having to open for inspection, changing tenants and losing money every time from crazy landlords holding back bond. – we have all been there. If you want to have security and control over your living situation, it is better to buy v rent.
3) Good time to buy: In the new home market, we are financing clients into their first home with as little as $1-2K deposit. We then do the cost equation for our clients, and most of the time the mortgage in the short term is a little more expensive, but better than waiting and finding lending has tightened again and ownership has moved out of reach.
My advice is simple, read books like barefoot investor to learn more about making the short-term sacrifice for a home loan. And, do your research in that getting into a new home can be easier and potentially cheaper than what you think at this stage in the market, providing you want to live in the area for the mid to long term. Check the numbers, but also consider all the factors when making this decision.
To talk to Brendan and the team at C-Finance Brokers about buying a home, click here.
Find North Harbour
North Harbour’s Sales and Information Centre & Display Village with café and two playgrounds is open seven days a week, 10am-5pm. Located on the corner of Buckley Road and Fraser Drive, Burpengary East, the Display Village showcases 33 brand new Display Homes from 17 of Australia’s best new home builders. To find out more about buying a home at North Harbour sign up for our email updates and find us on Facebook and Instagram (@northharbourliving).
Weekends at North Harbour
BITE Markets at North Harbour is a brand-new destination within the growing North Harbour community which has transformed weekends on the Northside of Brisbane. It’s the perfect place to eat, drink, catch up with friends and family, a place everyone is welcome, full of colour, adventures, wonderful food, entertainment and all sorts of flavours celebrating produce from the Moreton Bay region! Located at Exit 150 off the Bruce Highway on Nolan Drive, open from 4pm-10pm every Friday and Saturday night. Click here to see Bite TV!
North Harbour parkrun: 7am, every Saturday. Free 5km cross country run / walk around the future Heritage Park, everyone is welcome!
Sunrise Yoga in the Park: 8am every Sunday, free yoga class to suit all levels in Reflections Park. Beginners welcome, for more information please click the link.
North Harbour Café is also open every weekend including Friday Burger Nights and now delivers in the North Harbour and local areas every Friday night!