Published at: 6/21/2016 3:29:35 PM
Should you rent your first home or buy a place of your own?
There’s a lot to love about flying the nest. It’s the freedom to turn the beats up loud. Or stay in bed til midday. And bonus, no more tracking down the latest hiding spot for the chocolate biscuits.
Yep. You’re outta there.
But before you start planning the big housewarming party, take a deep breath.
Living out of home means paying for a roof over your head, and you need to think about whether you want to pay rent to a landlord or pay for a place you own.
Renting can have upsides
If you’re not sure where you want to live long term and you’d like to check out a few different locations, renting offers the flexibility to move around relatively easily.
Renting isn’t cheap but by banding together with a few flatmates you can trim the cost. Choose your flatmates with care though. Shared living can call for a fair dose of tolerance.
If your flatmate’s habit of playing Call of Duty at 2am, or finding yourself third in line to the shower each morning is going to be a problem, renting a place solo may be a more suitable (though more expensive) option.
One of the big pluses of renting is no worries about maintenance or repairs. If the hot water heater breaks down it’s the landlord’s problem. If the roof leaks during a storm it’s the landlord’s job to fix it. But if your best mate spills red wine on the carpet it’s very much your problem. One way or another you’ll be slugged for the cleaning bill (that’s what bond is for).
But along with the pluses, the big downside of renting is the irrefutable fact that you don’t own the place. No matter how much you may form a connection to the property, at any time the landlord can opt to sell up or raise the rent beyond your budget. It can mean having to relocate – even if you don’t want to – bringing a whole raft of moving expenses.
Buy a home – be your own landlord
If you can save a first home deposit, buying a home offer considerable pluses. Yes, it’s a major responsibility but by paying off a home you are building your wealth. Not the landlord’s.
You also have the freedom to decorate or renovate the place to your liking, and depending where you buy, the loan repayments may not be too different from market rents.
Bear in mind, as a home owner you’re going to face costs like home building insurance, repairs and maintenance, and council rates.
That’s why it’s worth doing the maths to be sure you can comfortably manage owning a home. Your parents are probably happy to help here – especially if they’re already chosen the new curtains for when Gran moves into your room.
Like to know more about the pros and cons of moving out? Check out ed – ME Bank’s free online school of money. It’ll the fast, fun way to learn everything you need to know about moving out for the first time.