“I’m just renting” is a term that needs to be re-evaluated.
No longer the poor cousin to buying your own home, those that rent may be having the best real estate journey of all.
With around 32% of all households now renting their home, and 1.5 million households owning a property they don’t live in- deciding to rent elsewhere- there is a definite shift in the perception of the renter.
So, what is the real appeal of renting?
Flexibility is one of the most positive aspects of renting over buying.
Within whatever the terms of your contract are, you can decide to move on at the time that suits you.
- Decide to go travelling?
- Job relocation?
- “Plus one”- a baby arrives and you need that extra room?
No matter what the situation, when you are leasing, when a change occurs, so can your home.
Not only do you get to live in a variety of properties, whether they be a flat, townhome, high rise, or an acreage, a renter gets to sample different neighbourhoods and lifestyles as well.
If you have ever wanted to know what it feels like to “hang ten” on a wave, work on your tan after work, or fish off the reef, then head to a beach ‘burb.
Love the theatre, the hustle and bustle and a busy nightlife? Try an apartment in the city.
Are you desperate for a little more peace and quiet, and need a tree change? If your work is in Sydney CBD or surrounds, head to Duffy’s Forest or Terry Hills. Are you able to live further afield? Look at the Hunter Valley, Illawarra, Bowral, and the Blue Mountain just to mention a few of many semi rural possibilities.
Renting allows you to try out different lifestyles without the long-term financial commitment.
You may discover after 6 months, or even a year or two, that that particular lifestyle is no longer for you and off you go to try another.
Trying before you buy can save you making a very costly mistake.
Which brings us to the next positive…
Yes, sometimes people rent simply because they can’t yet afford to buy.
Most landlords require a tenant to pay first month’s rent in advance, plus a security bond equal to a month’s rent.
When appliances break down or repairs are required, the owner of the property is required to arrange and pay for them to be fixed.
Often the cost of lawn mowing and garden maintenance is the landlords responsibility too, however the tenant generally pays for water usage.
Buying a property usually requires a deposit; say 10% or more of the value of the house (though 20% is ideal, for reasons not that relevant here). Comparably, this tends to be much greater than a months rent in advance.
Additional transaction costs:
Typically there are transaction costs associated with buying a home. Stamp duty is the major one with other additional such as pest inspections, appraisals, lawyers’ fees, etc.
Although it’s possible to have transaction costs when renting, these are usually easy to avoid or minimize.
Beer budget, champagne tastes
Did you know that quite often you could afford to rent a home that would be beyond your budget to buy?
One couple from Sydney’s Northern beaches sold their family home for around $3 million, early in 2017. They could not find a home they loved enough to buy, so decided to rent instead.
They found a waterfront property for lease, complete with a private beach, jetty and boathouse, worth $7.5million for just $1600 pw.
They have lived here for two years enjoying a lifestyle that they would not be able to afford to purchase.
Needle in a haystack
The purchase of a property is usually a long-term commitment. According to recent data, most owners live in the same home for just over ten years.
It is generally the wiser, and safer, option to sell before you buy. But what happens when your home is sold, and there is nothing on the market that takes your fancy?
Rather than settle for less than you want, rent until the home of your dreams is found.
Owning your own home has its advantages. More than just building equity, it’s being able to make your mark, make memories, and know that you are the one in control of how long you are able to live there. These positives cannot be underestimated, but until the timing is right, try renting instead.
When you next hear someone say, “I’m just renting”, know that there is nothing “just” about it – they may just be having the most varied and interesting real estate journey of all.