Those first time home buyers entering the property market in SA find that one of their major challenges is to overcome the “mental block” caused by short-term thinking.
Time and again we come across the attitude, Why should I buy when I can rent at a monthly payment that can be a much as 30% below the monthly bond payment – and which leaves me free of repair and maintenance costs and able to move on as and when I feel like it?
This mindset takes no account of the obvious fact that, whereas rentals will rise by 8 to 10% (or more) each year, bond payments on average remain the same – so that by the time the property owner is in his second decade of payments (even if he has moved on to a bigger home) it is quite likely that his monthly payments will no longer be a major burden and will be less than 15% of his gross income.
This article contains some very interesting examples that highlight the differences between buying and renting. If you can afford a bond payment, and you still rent rather than buy, this article is a must read.
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