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Q Is buying or renting better ?
I
A am often asked , “ Is it better to buy a home to stay in or buy an investment property and rent ?” The answer depends on several factors .
The best for me , of course , is both ! Buy an investment property in your investment entity and rent it from the entity . Then , when you want to move on , you simply move out and find another tenant . There are three advantages to rent from your property trust or company :
1
You save on the rental commission or management work if you manage the property yourself , improving your net rental yield and the return on investment .
2
You eliminate vacancy and default risk since it affects you directly .
You will better plan your exit from the property , and you will most likely pay rent to yourself .
3
You can make the property a home and renovate it as this will increase the property ’ s value , and you will reap the rewards of better rental income when you move out .
JACO GROBBELAAR Prosperity Enterprises
However , not all properties are investment properties , so it will not always be best to buy . In many instances , if you want to live in a property where the numbers do not make sense from an investment perspective , then it could be better to rent the home you want to stay in and rather acquire investment properties .
One important tip I can give is never to use “ My home is an investment ” as an excuse to live above your means . The monthly rent , and shortfall , on the property you live in should be well within your means .
4 SEP 2021 SA Real Estate Investor Magazine