South Africans are no strangers to long commutes when it involves getting to and from work. It is often customary, these days, for people to live in a town like Knysna or East London, and commute during the week to an office in Johannesburg, Cape Town or Durban. The question is whether it is better to rent or buy a property where you spend your work week.
Ultimately, this is a personal choice, and one that depends on a number of factors. You need to look at the length of your work contract, and if there were a possibility of your relocation to another post in a different town, in which case it would probably make sense to rent. If you are near retirement age, you may also not wish to take on the financial commitment of a second property or you may prefer to invest in a retirement home elsewhere.
Some commuters choose to keep their home base in an area of the country they feel suits their lifestyle at a more affordable price tag. They do not intend to move their families to the city and this may make them less inclined to buy their work accommodation. If you need to be based, for logistical reasons, in an area that is out of your price range, then renting is probably the better option for you. You will be able to claim your rental costs when filing your tax return.
Obviously, it is simpler and quicker to put a lease agreement in place than to go through the process of buying a property. Here are some factors to consider:
1. Rent First
If you do intend purchasing your commuter home, it would probably be wise to rent in the city first while you get a feel for the property market. This is particularly pertinent if you are a first time buyer as it gives you the time to build up a deposit while you look around.
2. Investment
A well-appointed apartment in an excellent location is an investment and there are potential tax deductions for income generating properties.
3. Customise your Work Home
As an owner, you will also have the freedom to alter the décor and landscaping, and carry out renovations if you so wish.
4. Good Investment
When you no longer have a need for your apartment, you can lease it out and if you chose wisely when you bought, you are bound to have numerous tenant applications. If managed correctly, buying your commuter home can increase your equity and credit rating in the long-term. Real estate in the city is certain to be in demand. When you do choose to sell it on it will most likely be at a decent profit.
Whether to buy or rent your commuter pad is essentially a choice influenced by your personal requirements and long-term goals. A highly regarded estate agency can help you to take stock of the pros and cons of the options available to you before you make a final decision.