Is it better to rent or buy

Is it better to rent or buy in New Zealand?

Is it better to rent or buy in New Zealand?

A man in a business suit, holding a small house in one hand and performing calculations on a calculator with his other hand

Ah yes, the age-old rivalry. Is it better to buy and pay for your own home or spend a life of paying another’s bills but reaping the more intangible benefits this bestows? The answer is surprisingly complex. Even the financial aspect of it is not as clear-cut as you might expect. However, when you throw in personal preferences, lifestyles, and expectations into the mix, it starts to get really interesting. At the end of the day, it is a conundrum only you can solve. We are here to arm you with the needed knowledge to do thatIs it better to rent or buy in New Zealand? Let’s find out, shall we?

Small red houses used for playing Monopoly

Ah, if only life were like a game of Monopoly, then it would be obvious what you should do!

The Economics of it All

Whether we want to admit it or not, this is what comes to mind first – the financial side of the equation. So, is renting cheaper than paying off a mortgage? Well, it tends to depend on where you live. Furthermore, we cannot view these costs as being permanently fixed. Interest rates are relatively low but are expected to rise. This will increase mortgage payments. Let’s complicate things a bit. If you have a fixed-rate mortgage, this will not affect you. But then again, interest rates do not affect rent either. Renting is more stable but is vulnerable to an increase once the lease is up. Still, for argument’s sake, let’s say it is cheaper to rent in your area. You start thinking about all the money you are giving to someone else, and it may feel like it is being wasted. After all, many people invest in real estate for a variety of reasons.

Going One Step Further and Looking Beyond the Obvious

Sticking to the financial viewpoint, when you are paying off a mortgage, you are also investing in a home of your own. Furthermore, there are ways to cut the cost of your mortgage if you are smart about it and have the possibilities. Yes, the interest being paid to the bank is ‘dead money’, but the rest is coming back to you. In a sense, a parallel could be drawn between it and a savings account. Let’s say house prices do not continue to increase and, at the end of a thirty-year period, you have a lump sum equal to the value of your newly paid-off home. This seems like great news for somebody who struggles to save money – a sort of forced savings plan.

Seems like renters get the short end of the stick here, but do they? Here it gets interesting. Renters will usually have better cash flow, right? They are not pumping money into an asset that is not generating any kind of income. If the renter is savvy about it, they may open a savings account and put a little bit away each month for a rainy day. Maybe they will invest the money, buy some shares, diversify their portfolio. Maybe, at the end of the ballad, they will not have a house but more money in the bank than the house. There’s something to ponder over.

It Doesn’t Stop There

It’s starting to look a little murky, and we haven’t even finished with the first point. Money tends to be interesting; there’s always more to say about that particular topic. Let’s take a look at several more factors that should be considered when asking yourself if it is better to rent or buy in New Zealand:

  • Houses aren’t cheap – Because the most expensive step to buying a home is, well, buying it, people overlook the expenses to come. But my oh my, can they add up. When you are renting, that broken stove and cracked window are the owner’s problem. When you are the owner, that leaky roof is your problem. Putting nerves and time to one side, these repairs are costly. By the by, home insurance is a thing too.
  • Down payment – When buying a home, a 20% deposit will be expected by most lenders. This is quite a hefty sum. Not only do you have to accrue this amount, but some more economically minded among you could also be thinking about alternative investments that could be made with such a sizeable amount.
  • Landlords – The savior and bane of many a renter. See, long-term leases are not so common here (Europe, for example, does this much better), and rent prices seem to rise when it’s time to sign again. Furthermore, if the landlord decides to sell or ‘kindly asks you to leave’ once the contract ends, moving and looking for a new place is costly, especially if it means paying more for the new home.

A puzzle in the shape of a house, with pictures of different banknotes on each of themMaking a financially sound decision consists of putting all the right pieces in the right places.

There Must be Other Factors that Determine if it is Better to Rent or Buy in New Zealand

Indeed, there are. As if calculating house prices, interest rates, income, insurance, and maintenance wasn’t enough, there are other factors to consider. The main one is stability vs. flexibility. You cannot have both. Buying seems like the obvious solution for those looking to start a family, not planning on moving anytime soon, and people with a clear long-term plan. Still, many people are marrying and having children at a later time. We live in an age where, when you hear the words’ digital nomad’, you understand what it means and entails. For those who do not want to be tied down, who change jobs and cities frequently, renting offers them the kind of freedom they crave.

 

It doesn’t end there, though. Renting offers the possibility to live with others. If they are close friends, this can be amazing. If they are strangers there to help cover the costs, this can be – risky. The landlord will be called to fix any problems – what a relief. The landlord decides when he will do it – what a hassle. Renting has yearly rental increases and inspections. Buying has 30+ financial obligations. A problem in New Zealand currently are tenant rights, or rather, a lack thereof. Changes are being made, such as the Residential Tenancies Amendment Act 2020, but it is slow. Psychologically speaking, buying a house feels like you are moving forward in life. Someone advocating renting as the better deal will state renting doesn’t tie you down. Is your head beginning to spin? Good, I was worried I was the only one feeling dizzy.

A man playing the drums, with large speakers next to him

Is it better to rent or buy in New Zealand? If you see your new roommate hauling in his drum kit into the adjacent room, the answer could be pretty straightforward!

Let the Current Take Your Current Worries Away

I hope I haven’t formed a whirlpool of contradicting thoughts in your head. It’s just a matter of calmly considering all the variables. If you are planning on moving to New Zealand, use the transit time to ask yourself what makes more sense for you. Still, before you do that, there is another small matter you need to take care of – getting your belongings to your new accommodation. Moving in the same area code can be tricky; shipping goods overseas from one part of the world to another can be extremely difficult. Just like choosing between renting and buying, you need to think about the best option for you. Who you should hire and what mode of transportation to pick. Carefully organize the overseas transport of your belongings to New Zealand, and they should all make it one piece.

At The End of the Day, It Depends on You

Here we are, at the end of the article. So, is it better to rent or buy in New Zealand? The best piece of advice I can give is, paradoxically, for you to not listen to someone else’s advice. What I mean by this is, people will say you’re throwing money away by paying rent, while others will claim you are losing your freedom by buying a house. Good intentions are there, but they see things from their perspective. You now know what factors to take into consideration. Wants and needs always differ. Make sure to fulfill your own while thinking about what makes sense long-term, not just short-term. Told you the answer is surprisingly complex!

By Mary Aspen Richardson

https://www.movingtransparent.com/how-to-make-changes-in-your-lifestyle/

Budget Design Home Improvements

Budget-friendly home improvement ideas

A color palette

Unfortunately, the coronavirus pandemic is still going strong. This means staying home all the time. But, this also means that you are saving money you would otherwise spend on traveling, eating out, hobbies, etc. So, why not use that money to improve the state and the look of your home? Renovating and redecorating the interior and exterior of your home can be a great little project that will help you pass the time. More importantly, it can help you increase the general value of your home (if you decide to sell it in one day). And, the best part is that many home renovations are simple and cheap; you just have to be creative. We are here to help you out with that! So, without further ado, here are some budget-friendly home improvement ideas that you can do this weekend. 

Give Your Walls a Fresh Coat of Paint 

It is simple – if you want to add value to your home and completely transform it, you should start by giving your walls a fresh coat of paint. This is one of those budget-friendly home improvement ideas that you can do in just a couple of days, and you can do it all by yourself. So, pick a color you like, gather your painting supplies, put some music on, and get started. 

We strongly advise you not to go overboard with colors. Choose something neutral (white, beige, gray, etc.) or pastel (yellow, baby blue, or pink, etc.) for the majority of your home, and keep the darker colors for smaller accent walls. Of course, be sure that everything matches your new walls – floors, furniture, decorations, etc. If you feel uninspired, check Pinterest or some home décor magazines – they will undoubtedly give you some creative ideas.

A couple painting their home

Caption: You do not need professional painters; painting is something you can do all by yourself.

Refresh Your Floors 

Do not stop with your walls – give your floors a fresh coat of paint too! This is a relatively cheap way of upgrading the look of your entire home, yet, many people don’t even consider it. Just like there are paint variations for your walls or your furniture, for example, there are options for your floors too! So, again, choose the color you like, the one that matches the ‘vibe’ of your home, and start painting.

However, keep in mind that this project will require some time. Painting the floors and letting them dry completely can last from five to ten days. Moreover, you will have to take all of your household items somewhere else – to your garage, basement, attic, or storage unit. If you opt for a storage unit, be careful as there may be some things that you won’t be able to store. Thus, before making your decision, do a little bit of research first and take your non-storable items elsewhere.

Add a Backsplash in Your Kitchen 

If your kitchen needs some love, adding a nice-looking backsplash is the way to go. This will add value to your kitchen without breaking the bank, and it will completely transform it too. Basically, you can do this project in two different ways. The more complicated but nicer-looking way is to use tiles. But, to create a backsplash this way, you must be handy with tiles and glue. If you are not, do not worry, there is a simpler (and a cheaper) solution. You can use an inexpensive material made from a single sheet. All you have to do with this one is cut it to fit your kitchen and glue it with the glue that usually comes in the package. This will not only make your kitchen look brand new but will also protect your walls from splashes, splatters, and all the grease coming from frying pans and pots. 

A kitchen

Caption: Adding a backsplash is not as complicated as it used to be in the past.

Let There Be Light 

There is something so beautiful and peaceful about well-lit homes. Proper lights set the mood and the atmosphere in the entire house. Thus, you should give this project some thought! If your home looks a bit dull, maybe all you need to do is layer lighting. Start by taking advantage of natural light. Remove those heavy window shades and dark curtains. Let the light in! If you still want some curtains (for privacy), consider lighter ones. Then, think about the lighting fixtures in your home. If your budget allows it, change all of them. If not, change just the ones that are in the rooms you spend the most time in. Moreover, you do not have to spend a fortune on a chandelier or a floor lamp – you can find cheap and unique lighting fixtures in thrift shops, flea markets, antique stores, and garage sales.

A living room

Caption: Proper usage of lighting can change the look and the feel of your entire home.

Refinish all the Wooden Pieces 

Last on our list of budget-friendly home improvement ideas you should try is refinishing all the wooden pieces you have in your home. These can be your furniture, doors, windows, or even that wooden fence on your deck or balcony. To refinish these, all you need is a spatula for scraping, sanding paper, and a refinishing oil or paint in the color of your liking. This is neither a complex DIY project nor an expensive one but is a project that requires your time and energy. Moreover, it requires some space, preferably outside, where you can sand and paint without worrying about all the mess. Give it a go – the end results will be amazing! But, remember, if you have never done this before, it might be a good idea to watch a couple of YouTube tutorials first. Educate yourself properly, and you will soon become a refinishing expert. 

By Mary Aspen Richardson

https://www.movingtransparent.com/how-to-make-changes-in-your-lifestyle/