Renting


Against
Renters...


· Don\'t have to put down as much money up front. There is no need to borrow money from banks to buy a home for yourself and, as rent is paid weekly/monthly, this is the better option, for people who may not be financially secure.


· Don\'t gain equity; nor do they lose it. Regardless of what improvements renters make to their homes, and any outside influences that cause the property value to increase - renters will never gain equity.


· Often cannot personalize their homes as they see fit. This includes such modifications as painting walls, but some landlords will allow renters to paint their walls only if they paint them white again before they vacate their homes, or removing carpet in exchange for floorboards.


· Reap no tax advantages. Any and all tax breaks and other tax-associated advantages are enjoyed by landlords.


For
Renters...


· Enjoy the assurance of fixed costs that won\'t fluctuate during the term of a lease.


· Can merely pack up and leave upon the expiration of their leases. They don\'t face the hassle of finding a buyer and waiting until a sale takes place. This is very convenient for people whose jobs or lifestyle require frequent moving.


· The lease is a contract - an insurance policy, so to speak.


· Face much less work in maintaining their homes, inside and out. In many multifamily properties, they enjoy the convenience of a full-time maintenance staff to handle appliance repairs and other minor repairs.


In general, renting a home makes sense for those who:



o Think they may want to leave the area in a few years.

o Like the flexibility of being able to move easily and the lack of responsibility for maintenance.

o Don\'t have the cash flow to pay mortgage payments, insurance and property taxes, or don\'t think their jobs are secure.

o Don\'t want to or cannot reduce other costly expenses, such as travel or private-school tuition.
Buying a house or a unit?


At the present time, or in the near future, my preference would probably be to buy a unit instead of a house. My decision would also depend on the current situations I would face in the unit which I bought. Such as…


· Whether the units were free standing or had shared walls


· What the age group and mix of the tenants is


· What the rules of the body corporate are eg no pets, car parking restrictions, use of public spaces


· Whether there is a complaints mechanism for disputes between owners or tenants


I would prefer to buy a unit because at a young age I wouldn’t need an entire house to live in, even if I shared with a couple of friends. Maintenance of a small unit would be a lot easier and I like that you would live in a small space with several other people because, if you all got along, it would be a lot of fun. Also most young people, I think, prefer units as it is a lot more financially kind in the way that when in university you would have a lot of debts (as in HECS) and adding a home loan to that list would make things more complicated.


10CO


Bibliography:


http://realtytimes.com/rtcpages/20000406_rentvsbuy.htm


http://timesargus.com/Business/Story/80524.html


http://moneycentral.msn.com/content/Banking/Homebuyingguide/P37630.asp