Renting This Time of Pandemic: Intellichoice Finance
Since getting a mortgage is a long term commitment, getting one must be well thought through. Otherwise, if committing to a long-term loan is a bit too much for you at the moment, renting might work for you.
By: Intellichoice Finance
But for Darin Hindmarsh, founder and CEO of Intellichoice, there are several things that one must look into before deciding whether to buy or just settle for renting instead.
By considering these factors, disappointment may be avoided. He listed some pros and cons of both buying and renting a house for dwelling purposes.
Renting a house: Pros
"Some of the basic ones we see is that you don't have a large mortgage over your head. The landlord covers all the outgoings and they can be considerable, depending on whether it's just right. So body corporate fees or sinking funds if they're new units: all these costs are covered by the landlord," Hindmarsh said.
An ABS report revealed that the percentage of households that rent their homes grew to 32 per cent in the period of 2017-2018, which is 5-percent higher than the period 20 years prior.
Apart from the savings that one can get from buying a house, it also gives one the opportunity to live in the areas that one wouldn't normally be able to afford to buy a house in. It is very true if one can find the right rental property that can do just that and it's a lot cheaper than that.
In this time of high uncertainty and landlords not willing to put up the rentals too much, renting can often be cheaper than getting a mortgage .
Renting a house: Cons
"With renting, you are basically helping the landlord pay off their house or houses.There are a lot of decisions that you have no control over. If the landlord decides to sell or something happens and you get thrown out, there's nothing really you can do about it," Hindmarsh noted.
Leases generally last anywhere from six to 12 or 18 months and then for any reason like you just choose to not continue that and then you'll soon move out.
Some of the money that you would normally put into your house if you bought it could be used to reinvest into the market, share, or super. These things should also need to be considered and sometimes they can be the least easy choice to make without all the right information.
Darin Hindmarsh is the founder and CEO of Intellichoice (https://www.intellichoice.com.au/