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Buying a House vs. Renting an Apartment in Australia

May 14, 2019

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Are you planning to relocate to Australia soon? If so, you might be wondering whether it's better for you to buy a house there or stick with renting an apartment.

There are benefits and drawbacks to each option, so it's important to do your research before you make a final decision.

If you're not sure where you stand on the buying a house vs renting an apartment in Australia debate, keep reading.

Explained below are the pros and cons of both buying and renting. Keep this information in mind, and you'll have a much easier time deciding which is right for you.

Buying a House

Approximately 70 percent of households in Australia own or are in the process of purchasing their home.

Here are some of the pros and cons of joining this group and purchasing a home when you arrive in Australia: 

Pros

There are lots of reasons why someone might want to purchase a house in Australia. 

When you purchase a house, you have the opportunity to build equity and work toward owning your own property.

The money you pay each month goes toward you eventually being the owner of that house. When you rent an apartment, the money you pay each month goes toward your landlord eventually being the owner of that apartment. 

Buying a house also gives you a lot of flexibility.

You can, within reason, do whatever you want to it—handle the landscaping any way you want, knock down walls to create an open floor plan, or build a deck on the back. The choice is yours.

As a homeowner, you also get more privacy than when you're living in a home. Things will be quieter, assuming you're living in the right neighborhood, and you won't have to share common areas with dozens or even hundreds of other people.

Cons

At the same time, there are some disadvantages that come with buying a house in Australia.

When you buy a home, you are responsible for maintaining it. If the air conditioner breaks or there's a pest control issue, you are the one who has to deal with it.

Keeping a home in good condition can be quite expensive, so you have to make sure there's room in your budget for potential repairs and costs that go beyond your monthly mortgage payment.

There's also a significant amount of uncertainty that comes with being a homeowner.

You could buy a house at a time when the market is doing very well. There's no guarantee you'll get back the amount of money that you paid for that house, though.

If the market drops and you have to move for any reason, you could end up losing money depending on the current situation and how quickly you need to sell.

It's more challenging to become a homeowner than it is to start renting, too. You'll need to have a high credit score and be able to provide a significant downpayment. If you're not in a position to do this, you might not be able to buy a home even if you want to.

Renting an Apartment

After reading about the pros and cons of buying a house in Australia, are you interested in taking that approach? Or, do you think it's better for you to rent an apartment?

If you're leaning more toward renting an apartment, be sure to consider these pros and cons:

Pros

Owning a house is great for some people, but it's not ideal for everyone.

Renting an apartment might be a better option for you if your financial situation is less-than-ideal. You could rent an apartment while you work on building your credit or saving up for a downpayment, then buy when you're financially ready.

You might also want to consider renting an apartment instead of buying while you wait for the market to change in your favor.  

Renting an apartment can also be much more convenient than buying a home. When you rent an apartment, you have access to a lot of services and amenities that you wouldn't have as a homeowner.

For example, as a renter, you'll likely have a maintenance staff that handles things like snow removal, apartment repairs, and lawn care. Many apartments also feature pools, recreation areas, and other amenities that you wouldn't be able to afford otherwise. 

Apartments also provide you with additional flexibility. It's easier to pick up and go if you're a renter, so you don't have to commit to one location for the next 15-30 years of your life.

Cons

At the same time, apartment living does have its downsides. Apartment complexes can be noisy, especially if you're living on one of the lower levels. 

Many people also feel that, when they're renting an apartment, they're essentially throwing money away each month.

You're not exactly throwing your money away, but you're also not working toward eventually owning your own place, which is something most people want to do at some point in their lives.

As a renter, you'll also have to abide by the rules put in place by your apartment complex. This could make hard for you to do the things you want to do, like throw parties, fix up the apartment to suit your specific tastes, or even own a pet.

If you value freedom and want to be able to make adjustments to your living space without asking permission, renting probably isn't for you, at least not long-term.

Buying a House vs Renting an Apartment: Which is Right for You?

Now that you have more information regarding both options, what do you think about the debate on buying a house vs renting an apartment?

Which option makes more sense for you and your current financial situation?

Do you want to learn more about the real estate world? Would you, perhaps, like to know more about becoming a real estate investor?

If so, be sure to check out some of our real estate videos today. This one on real estate investment is a great starting point.