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To Buy or Rent a House

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  • To Buy or Rent a House

    Which is better option for a long stay: to buy or rent a house?

  • #2
    Buy (MAMC)
    www.3888444.co.nz
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    • #3
      It depends on the property. A twist on this can be to own a rental property but to rent yourself. Often this is the best financially, but normally emotions take over and you want a personal house.

      The reason for this is that most rentals run at a loss when they have a full mortgage. So if you buy a house with a reasonable mortgage, it is likely that the interest, rates, insurance, repairs cost more than rent would be. And thats even with low interest rates. If you put in a 20% depoisit that might even it out slightly, but still a good house in a good area, without mutliple dwellings etc is likely to cost more than it would to rent.

      Then you can buy a rental property with a higher cashflow that hopefully pays for itself. You are still getting the potential capital gains, just not from your personal home.

      Another option is to buy a multiple dwelling house as your personal home. Rent out downstairs and live upstairs for example. I did an article on this a few months ago, and off the top of my head it dropped the loan from a 30 year loan to a 13 year loan! So you would be debt free 17 years quicker!

      Ross
      Book a free chat here
      Ross Barnett - Property Accountant

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      • #4
        I love Rosco's reply, my thoughts exactly.

        Remember that long term ideas can quickly become short term in today's world.

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        • #5
          If you are planning to stay for long time, it is always a better option to buy a home. It requires big investment so if you don’t have enough amount in your account, it is my personal recommendation that you should try to get a home loan. It is a very easy process to get a home loan, but it requires all necessary documents in your hand. Also it must be remembered that you should compare it with different lenders before going to apply as it can save you a lots of money on interest. There are many comparison websites where you can compare interest rates and can apply for a loan with suitable lenders.

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          • #6
            This thread gives us ideas about to buy and to rent the homes. This is very intersting discussion above and give us beautiful ideas for this.

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