Many people want to get on the property ladder as soon as possible, and buying their own home is often one of their life goals. Renting a property can sometimes be seen as a waste of money, as you’re not paying towards any form of ownership or investment. However, in some circumstances renting can be a good financial move. In this article, we take a look at why renting can be a good financial move for some people.
Buying a home is very costly; you usually need a large amount of money to put down as a deposit to secure the property and your mortgage. Along with this initial deposit money, you’ll need to pay the cost of hiring a solicitor and other professionals to help with the legalities of buying a property. When it comes to renting, the costs are much lower; you only usually need to pay a relatively small deposit and some other fees. This is much more affordable for many people and allows them to get a place of their own without needing large sums of money. If you keep your property in good condition, you will usually get the deposit money back, which can be used for your next rental property or to put towards a deposit for a mortgage in the future.
When you purchase a property, you are responsible for all of the maintenance and ensuring that nothing goes wrong. This can be expensive, especially if you need to hire a professional to complete electrical work, gas maintenance, or fix plumbing issues. Property maintenance also takes time; you will need to dedicate time to painting, fixing issues and gardening unless you’re willing to pay a professional to do all of these things. When you rent a property, the amount of maintenance you’ll need to do is greatly reduced; any major repairs should be fixed promptly by your landlord as part of your contract. You may still need to keep the garden tidy and generally look after the property, but the maintenance burden is significantly reduced. Renting can be a good solution if you’re concerned about having the money and time to maintain your property.
Hong Kong homes and properties in other locations will fluctuate in price, and you might find that they don’t always increase. By investing in buying a property, you’re taking some risk; your investment could go down in value and result in a loss of money. Those that rent aren’t subject to the changes in the property market; they pay a fee to rent the property but don’t need to worry about their investment reducing in value over time.
When you buy a property, you are making a large commitment to living in that location. Moving is possible, but it's costly and time-consuming as you’ll need to pay estate agent fees and solicitor fees. Those that are renting have much more flexibility to move when their contract comes to an end. This means if they’re offered a better-paid job in a different location, they will have the freedom to move without worrying about the hassle and costs of selling their property. This can save them money and help them progress in their career. Renting is perfect for anyone that wants the ability to move at short notice and live in a different city or even a different country. Buying a property is more suitable for those who are settled and want to remain in one location.
Renting isn’t always a bad financial decision; it can be the right decision for many people, especially if they want the flexibility to move in the future without incurring high costs. In addition, when you rent, you will save money on maintenance costs, you won’t be subject to property value fluctuations, and the initial deposit needed for renting is much smaller than buying a property. Financial investment is not the only factor you should consider; renting can be a great option if you need to move somewhere quickly and don’t have several months to wait for the buying process to be completed.