Regardless of where you are or what kind of career path you’ve chosen, you’re going to need to live somewhere. Typically there are two different options: renting or buying a place. Each of these come with their own pros and cons and neither is necessarily right.
Of course, we need to first address the elephant in the room: price. House prices tend to increase each and every year, while the salaries of the working class don’t grow in the same way. This has led to a problem in the housing market where many cannot afford to own a home. And those who do will sell for significantly higher prices, usually to turn a profit. It is a problem that is not easily solved. In a city like Cape Town, for example, all of the prime housing is centred around the city centre where many residents work. This has lead to astronomical prices for apartments and those houses that are left.
But putting the extreme cost aside, buying a house (if you can afford it) is not a bad idea. Even purchasing a flat or townhouse falls under the same positives. Property gains value each and every year, which means you can eventually sell it for a profit unless there is a market crash. While this doesn’t work in favour of the buyer, it does for the seller. But there are additional costs when it comes to purchasing your very own concrete, four-walled structure. Besides the asking price, you will need to pay transfer costs, rates and taxes, and levies. All of these can add up to a substantial amount but will likely pay off in the long run. You might need to use a personal loan calculator if you cannot afford everything right now.
As for renting, it too holds its own financial positives. For starters, you don’t need to own the property, which means some of these previously mentioned costs simply fall away. You will, however, need to pay a monthly rental and have enough money for a deposit in order to rent. In the long term, you are essentially paying off someone else’s bond instead of your own.
By purchasing and living somewhere else, you can rent out the property to tenants in order to help cover the cost of your bond. This will go a long way in paying it off as soon as possible.
Renting a flat or house means that you don’t have any control over the property at all. And, if you do, then you are incredibly lucky. For starters, moving in requires the letting agent to write up a report of the house and state what is broken. If they don’t find it in the same condition when you move out, you could forfeit your deposit.
If you want to change something within the flat – say put up a shelf – you’ll need to ask permission from the landlord, even if you think it is to their benefit. This can result in a lot of pain and hassle for you. And, in many instances, the flat needs to be returned to its previous state, which requires you to fill in the drill holes for the shelf and paint the wall.
For homeowners, you can change pretty much anything you want, from the colour of the interior to building a braai place. Though the building aspect doesn’t mean you can go wild and build a massive atrium. In fact, you’ll often to need the local council’s or home owner’s association’s permission for any alterations that may change the physical layout of your home.
It is not uncommon to rent from a difficult landlord. Besides imposing strict rules on what you can and cannot do within a rented property, you’re not always their priority. For example, fixing a burst geyser in your owned house or flat requires calling the plumber. With landlords, you’ll need to contact them first, wait for costs to be sorted, and you could be without hot water for a few days.
Renting is usually quite easy when it comes to changing jobs or moving to a new location. Typically, you’ll need to find someone to take over your lease or just jump through a few small hoops. For homeowners, this isn’t as straightforward. Moving is a far more complicated process that requires finding a buyer for your home, putting in transfers, and usually packing up more stuff than you would have in a rented place.