Sometimes it can feel like only real estate folks trumpet the virtues of buying a home.
But, in real-life terms, why is buying better than renting?
Jason Francis, a 36-year-old fly-in, fly-out train driver originally from New Zealand, but now based in Western Australia, has more money in his pocket after building his first home, a three-bedroom house in Two Rocks, a beachside outer suburb of Perth.
Francis, who used SOMO – a Perth-based operator which helps first-time buyers find affordable housing – spent $369,000 on a house and land package and his mortgage is less than what he previously paid in rent.
“It seems crazy, but I am actually $360 a month better off. But I own my home, which I know is going to go up in value and I won’t have a problem re-selling in the future if I want to,” he says.
Francis says he now has the financial freedom to do things he previously couldn’t, whether that’s putting excess cash towards an investment of some sort or spending it on overseas travel.
Buying your own home can create options for your future. Picture: Kate Griffin
Sydney lawyer, Thomas Nguyen, who this year moved into a two-bedroom apartment in Sydney’s eastern suburbs he purchased in late 2017, sees property as a long-term wealth-creation strategy.
Despite the downturn in the past year or so, Nguyen is hopefully property prices will rise over time. He plans to use the increasing house value as equity to finance deposits for future properties.
Jessica Frankel, 31, bought her first home, a three-bedroom house in Hamilton, in regional Victoria for $305,000 in April this year. She says it’s easily the best decision she’s ever made, financially and personally.
After years of renting, Frankel, who works in agriculture, loves watching her earnings pay off her own real estate – not her landlords’. It’s a long-term investment on capital that will gain in value in coming decades.
“I was sick of paying someone else for a roof over my head. I may as well be investing that money into a long-term asset for myself. I also now have the scope to make improvements, and do what I like with my own place,” she says.
If you’re smart, your first home can be a building block for future wealth, Frankel says.
Buying your own home can give you a sense of security. Picture: Kate Griffin/REA Group
Even the most easygoing landlord, the one who says “sure, paint the walls lime green, I don’t mind”, can decide to sell your rental home.
As a tenant, you know you can be asked to leave at any time. Having your own home offers a sense of security because no one can decide to sell it from under you.
Nguyen says a lack of certainty is a big drawback of renting.
“When you’re renting, there’s absolutely no security when it comes to tenure, as your landlord could sell the property or break or not renew the lease.”
Samantha Lowndes, 31, bought her first home, a two-bedroom unit in the Geelong suburb of Highton, for $263,000 a few months ago. She says it made financial sense, as well as offering her a level of security.
“It’s simple, I love owning because I don’t have to deal with the landlords and I can do whatever I want to my place, without having to ask permission like a school student raising their hand in class.
“It’s mine and I can do with it what I please, whether that’s painting the walls, renovate the kitchen or hang a cute gallery wall,” she says.