Buying a House
Should I buy a house?
There is a lot of information about the benefits of buying a house but is this the best option for you? If you are renting you may feel that the cost of rental could be used to pay off a home loan. Buying a home is a 'bricks and mortar' investment and future asset. However there are risks associated with purchasing and owning a home. For example, you may face unpredictable costs such as changes in interest rates or costly repairs.
What are the advantages and the disadvantages of home ownership?
Advantages include:
- investing in a property rather than renting;
- gaining a long term asset which should appreciate in value over time;
- building up good credit record and having equity for retirement;
- using investment in property to finance other investments;
- personal or family lifestyle will benefit with a stable environment ; and
- you can change your home to suit your tastes and needs.
Disadvantages include:
- substantial commitment of income for long periods ( usually 25 to 30 years );
- additional costs to maintain property to maintain your investment;
- ongoing costs required by government such as land tax and council rates;
- reduced mobility;
- future credit rating problems if your loan cannot be serviced by regular payments; and
- loss of disposable income and lifestyle adjustment.
