Daily Archives: November 11, 2020

Which is Better – Owning or Renting?

Part of the Australian dream that many people aspire to is to one day own their own home. But this dream is not for everyone. Buying a house is a lifestyle choice – and a big one at that! Owning and renting a property each have their pros and cons. Here are some that you may want to keep in the forefront of your mind before making a decision.

The Pros and Cons of Owning and Renting

Part of the Australian dream that many people aspire to is to one day own their own home.

But this dream is not for everyone. Buying a house is a lifestyle choice – and a big one at that!

Owning and renting a property each have their pros and cons. Here are some that you may want to keep in the forefront of your mind before making a decision.

Pros of Renting

  • Allows you to stay financially free, as you will not have substantial debt through a mortgage.
  • Option of securing a fixed or period lease, which enables you to move around with ease instead of being tied to a home.
  • No maintenance/repair responsibilities, this will be the landlord or property manager’s job.
  • Can rent a house in an area you may not be able to afford to buy in
  • Rent stays at a constant amount for agreed tenancy, rather than paying a mortgage at a varying interest rate

Pros of Owning

  • You are securing yourself a valuable asset and long-term investment.
  • You can choose to do what you wish with the building and the land (within council regulations).
  • Equity can be built up over time through your home loan payments and used to buy additional homes or for renovations.
  • Have the freedom to have pets or children living at your property
  • Choice of location is up to you – great for choosing schools, amenities etc.

Cons of Renting

  • You sign onto a fixed tenancy, which may not be good for long-term flexibility.
  • Landlord has the right to not renew your lease at the end of your tenancy.
  • Many rental properties do not allow pets, so this may not be a suitable option if you have them.
  • Your landlord can increase your rent, leaving you to pay more or vacate the property.
  • Cannot alter or customize the property to suit your taste.
  • Many costs involved in the process, e.g. letting fee, bond, rent in advance.

Cons of Owning

  • Will likely require a mortgage, you need to be comfortable with taking on substantial debt.
  • Many costs involved in the process, e.g. stamp duty, lawyer fees, loan establishment fees.
  • On-going costs, such as maintenance, repairs, council rates, tax.
  • It can be difficult and time-consuming to save up for a home deposit (at least 10 per cent of the purchase price).
  • Your budget will determine the location that you can buy a home in – potentially leaving you to choose from cheaper suburbs.
  • Both options of buying or renting a residential property have their plus-sides and their pitfalls. It’s ultimately up to you to decide which option is best suited to your needs and long-term goals.

Pets or no Pets? A Landlord’s Guide

When owning and renting out a property there are a number of considerations to be made. Finding the right tenants for your home can be one of the most difficult. There is also the question of whether you are going to allow the furry kind. Pet friendly rentals are largely coveted and allowing tenants to bring along their animal companions may result in much higher demand for the property.

The Benefits of Allowing Pets

When owning and renting out a property there are a number of considerations to be made. Finding the right tenants for your home can be one of the most difficult. There is also the question of whether you are going to allow the furry kind.

Many people count pets as part of the family and a landlord allowing pets into their rental properties may gain a competitive advantage. Pet friendly rentals are largely coveted and allowing tenants to bring along their animal companions may result in much higher demand for the property.

Although there are risks that come along with pets, there are a number of ways you can reduce potential issues.

A Pet Friendly Property

Determine what type of pet is appropriate for every rental property you own. If you only have a small courtyard then a cat might have to be the limit. If there is a large garden but no fence, a dog might be an issue.

Consider the amount of carpet in the property – tiles and wooden floors are obviously better for animals as they don’t retain odour, but they may be scratched by claws. If the property comes furnished check whether pet loved furniture such as couches can be easily damaged.

It is important also to think of neighbours living in close quarters and whether the introduction of an animal may disturb their peace and quiet.

Make an Educated Decision

If the pet is a dog, consider meeting it before agreeing to it moving in. Meeting a dog allows you to make an assessment of its temperament and whether or not it is well kept. Obtain references from prior flatmates or neighbours to be fully informed of any prior issues with the pet.

Make an evaluation of the potential tenants, too. Pets are an extension of their owners, a diligent tenant is more likely to have a well-behaved and well-groomed pet.

It’s also a good idea to check your landlord and building insurance policies to see what may or may not apply if a pet is allowed to live at the premises.

Include a Pet Policy in the Tenancy Agreement

A pet policy is an agreement made between the landlord and tenant outlining matters relating to the pet. Commonly the agreement will give responsibility of any costs arising from the pet to the tenant, or provide conditions the tenant must fulfil on vacation of the property, such as getting carpets thoroughly cleaned.

Some states even allow landlords to take a pet bond for their property, which could be something worth looking into for peace of mind. There might also be further conditions you wish to include, such as keeping the pet outdoors at all times.