Renting: Hard wicket but has positives

Whywould you choose to rent? In the scheme of things, it’s a bloody tough time to be a tenant right now (not that investors have it all that easy either) and while legislation has been rolled out to make the experience of the tenancy safer, there is no doubt that the combination of uncertainty of future leases and the near guarantee of rental price increases is causing a lot of stress.

Aside from the obvious financial limits, there are of course, as many reasons to rent as to buy. For many, renting is a stepping stone as people find their independence, learn to save, and work out their next steps without incurring the costs of transactions – stamp duty, legal fees, agent fees and all the rest.

Renting can also be used as a way to work out what you like and where you want to be – i.e. when moving to a new city you will generally rent for a while to work out, firstly, whether you like the place you’ve moved to, and secondly, where exactly you want to be as far as commuting, schools, restaurants and the rest.

Another benefit of renting is that while you need to keep it neat and tidy, you aren’t responsible for much beyond that. A tenant doesn’t get the bill when an aircon needs replacement, a hot water system gives out, or the kitchen floods – though they often will have to cop the inconvenience.

On top of those unexpected costs, tenants also skip the rates notice every six months, climbing house insurance premiums, and of course rising interest costs. Arguably these costs all do flow through in rental increases, but the lump sum hit can at least be avoided.

Renting also offers the flexibility to (normally) upsize, downsize or relocate as you like, with costs limited to the actual move.

Current market conditions have curtailed this to a high degree, however, as people stay put rather than risking a move.

On the flip side, while they cop the costs, there are plenty of reasons to own.

One, the security of being able to decide when your residency ends, rather than having an end date on an agreement.

Another is that while repayments will often be higher than rent, part of that payment every fortnight goes towards your equity.

Plus it’s a great feeling to hang a photo on the wall, without having to ask first.

Tom Quaid is the REIQ Zone Chair for Cairns