Author: By Angie Schiavone
Date: May 01, 2006

Not just money influences the decision to rent. Everyone's heard the adage "rent money is dead money", but in certain situations there's good reason to let your cash cark it. Sure, in the long run it is generally more beneficial to own your own home, but renting can be a lot more flexible than buying, both financially and in terms of day-to-day lifestyle.

A simple internet search will uncover several "renting-versus-buying" calculators, which compare the costs of each option. This can be helpful, but it is important to consider your own needs as well.

The lifestyle you desire is personal and is perhaps the most important factor in choosing between renting and buying. If you can't afford to buy in your dream suburb it doesn't mean you can't live there. Whether it is close to work or right by the world's best beach, renting certainly broadens your options.

THINKING SHORT TERM

Renting is most practical for people who need short-term accommodation arrangements. It suits certain work circumstances, such as people who shift around Australia for work.

The same applies to students who, in addition to the likelihood that they don't have a high disposable income, are likely to want to live close to their place of study throughout the duration of their course.

FINANCIAL ISSUES

Buying a home is a serious long-term investment and, for many people, it can be a somewhat unrealistic goal.

Some tenants in certain suburbs, who pay up to $1000 a week in rent, could quite easily be paying off a mortgage. But there are reasons to rent. Business owners for example need the equity and savings to support their business, while others may have concerns about the sales market, so are looking at other types of investments, such as shares. Over the past few years, there were certainly some people who chose to sell their homes and rent while they waited for the property market to bottom out.

If you work in the city then renting close by, as opposed to buying further away in a more affordable area, can have financial benefits as well. If you have better access to work, there's less travel and related expenses.

LIFESTYLE

While not everyone can afford to buy in Toorak, they can still experience the lifestyle by renting there, even if only for a while.

To find something affordable, many buyers have to go to areas that are less convenient and desirable and further away from family and friends. Renting gives you a lot more freedom.