Should I own or rent my home?
We have just made our 7th move in the 7 years since we sold our house and became nomads.
What are the advantages of renting rather than buying your home?
Buying
- Home owning is expensive. You pay Transfer Duty, conveyancer’s fees, rates, levies, insurance, interest, repairs, maintenance.
- You buy with your heart and not your head, so you probably do not get the best deal, which makes the bond repayments higher than they should be.
- You are stuck there and can’t just up and move away when things go wrong or you feel like a change.
- You end up doing the same old, same old, month after month, year after year.
Renting
- It is cheaper, because you don’t have all those costs.
- You rent with your head and not your heart, so if you don’t get a good deal, you rent from someone else.
- If you rent from an inexperienced person, you will get a great return for your rental, because that person did not buy well. So you may well get a R2m house for R10 000 per month, or even a R5m house for R20 000 per month. If you can afford R50 000 per month, you can probably find a R20m house or apartment for that price.
- Your only problem with repairs and maintenance is getting the landlord to attend to them. Although, we often just get them done ourselves and save the hassle.
- If your business hits a rocky time, you can quickly downsize until things pick up again. We used Covid to get a R10 000 a month reduction in rental, even though the business didn’t actually take a knock.
- You are free to move, just as we have every year. And every move opens new experiences, so you can live a very colourful life.
- If your business can be conducted remotely, you can live and work anywhere, changing whenever you want to.
Caution
When you retire, you will have to continue paying rent. So the money that you save by renting must be carefully invested to produce that extra income on retirement. My book “16 Steps to Wealth”, which you can find at www.16steps.co.za teaches you how to do this.
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