MyMoney Online

3 reasons to rent rather than buy a property

The traditional approach to sound financial planning is to buy a property as soon as you can instead of renting. The rationale is that you will be better off paying for your property as soon as you can with the rent you are paying to your landlord.

Listen to Paul chatting to Sam on Weekend Breakfast...

Paul's reasoning is as follows...

Cash fund first

If you are starting a new job, business, or if you are a contractor or freelancer you need to be confident that you can comfortably generate consistent income. Buying a property binds you to a long term financial commitment which you will need to cover over the long term. You should aim to settle down first and get a good fix on your income over a period of time.

You need the peace of mind that you can cover your monthly expenses for at least 6 months. So step one in your planning is to save into a cash account until you can comfortably cover your living expenses for 6 months before even considering buying.

Property binds you

If you buy a property you immediately bind yourself to a location. If you find a new contract on the other side of the city or country for that matter, you will then be burdened with the extra cost of commuting further or relocating, Renting will allow you to consider options of moving closer to where your work takes you.

Cash is king

Whilst you are a tenant the risk and costs associated with owning a property belong to the owner. Whilst renting you are freed up to save as much cash as possible for the eventuality of buying your own home one day when you are well settled in your career have saved a comfortable cash fund.

Currently the property market is pretty flat and there is no compelling reason in the foreseeable future to rush in and buy. Mindful of the fact that interest rates are on the rise, the cost of borrowing will be that much more and your interest on your savings account will be that much better.

Read more from Paul Roelofse on www.investforlife.co.za

Read More
2 best investments on the JSE right now (and one from the USA)

2 best investments on the JSE right now (and one from the USA)

It’s Stock Pick Monday on Bruce Whitfield’s The Money Show. He interviews I-Capital Managing Director Lance Williams.

Women are better investors than men

Women are better investors than men

Warren Ingram explains why it is that women clearly outperform men.

Hottest shares you can buy right now (by Fairtree Capital)

Hottest shares you can buy right now (by Fairtree Capital)

The Money Show’s Bruce Whitfield interviews Portfolio Manager Jean-Pierre Verster.

Unsure where to invest? These are the best shares right now (by Anchor Capital)

Unsure where to invest? These are the best shares right now (by Anchor Capital)

Sumitra Nydoo (on The Money Show) interviews Anchor Capital Analyst Henry Biddlecombe.

How accurate (or off the mark) stock pickers on The Money Show have been in 2017

How accurate (or off the mark) stock pickers on The Money Show have been in 2017

Bruce Whitfield grills three stock pickers he interviewed in January on the performance of their picks for 2017.

3 epic shares to buy right now (by Herenya Capital Advisors)

3 epic shares to buy right now (by Herenya Capital Advisors)

These are the three hottest investments you can make right now, according to Petri Redelinghuys.

Popular articles
Discovery CEO (and founder) Adrian Gore bares his soul about money

Discovery CEO (and founder) Adrian Gore bares his soul about money

The Money Show’s Bruce Whitfield interviews Gore about his attitude to money (hopes and fears, successes and failures, etc.).

Ocean Basket gives franchise owner the chop after assault video

Ocean Basket gives franchise owner the chop after assault video

The man was immediately divested of his shares and is no longer part of the group, explains Ocean Basket CEO Grace Harding.

LISTEN: A 'smaller nyana' mash-up of Bathabile Dlamini's most outrageous quotes

LISTEN: A 'smaller nyana' mash-up of Bathabile Dlamini's most outrageous quotes

ANC Women's League president Bathabile Dlamini is no stranger to controversy and has made many head-scratching comments before.

WATCH: Cape schoolkids 'starstruck' after Trevor Noah,  Charlize Theron drop by

WATCH: Cape schoolkids 'starstruck' after Trevor Noah, Charlize Theron drop by

Oaklands High principal Reza Patel says it was an extremely exciting experience for both the learners and staff. We can imagine!

CoCT explains new electricity tariffs

CoCT explains new electricity tariffs

Following residents concerns over new electricity tariffs and properties being re-evaluated, Johan van der Merwe provides clarity.