We have discussed previously the buy vs rent debate.
There are some strong arguments to both sides. Having just visited a friend who has moved to a new house, a few more points became clear.
The house is old. Not dilapidated in any way, but it would seem it is a freshened up 50 year old’ish building. It has fresh new paint and nice new wooden floor boards and it really feels nice and new. But it isn’t. This became evident when the cook top stopped working. An electrician came out and concluded that there was a break in the really old wiring “somewhere”. But he could no longer get to the wiring as the floors had been newly laid over the access trap doors essentially shutting down any hope of a recon mission to locate the faulty cable break. As such, a new wiring job was required. At the cost of a few thousand dollars.
Next to go was the pool filter. A leak somewhere. Apart from the fact that the pump was new, the pipes were not. As such, new pipes required. Another few thousand dollars at best.
Adding to the cost is the garden maintenance. The new place has a large block of land that requires regular mowing, pruning, raking, etc. All at a costs – even if you do it yourself as there are costs of supplies and chemicals plus the cost of your time… that could be spent doing other things.
This particular place also has a tennis court (sounds more impressive than it is). The court is in poor condition and I would guess that resurfacing it would cost tens-of thousands.
And all this has happened within the first 2 weeks of these guys moving in.
All costs are for the landlord to cover. Again, food for thought on both sides of the equation – great if you are renting as you don’t have to pay for repairs… not great if you are the owner of place and have to continually spend thousands each year on maintenance. One would expect that at some point these costs would push on to the tenant but if they are large capital costs for repairs due to lack of maintenance, this is not always the case.
I guess the message here is that when considering buy-vs-rent consider all the factors.
If you “just squeeze” in to buying a place (financially speaking of course), bear in mind that you will still need to have spare cash available for maintenance, let alone, council fees etc. that are not payable as a tenant. You monthly rent payments should not simply be converted to home loan repayments when moving from renting to buying, you need to have some capacity to cover the unexpected.
At MyRate we recommend you review the situation regularly trying to take into account all the extras within your budget.