It is usually cheaper to rent in a neighbourhood you like living in than to buy a home there. If you are renting a home that enables you to walk to work, the gym, and shops, for example, or so that your children can be close to school, a move to a different area might not suit you at present.
Moving to a cheaper neighbourhood that is distant from amenities will almost certainly entail additional transport costs. You need to take these into account, as well as the lifestyle changes you will almost certainly have to make.
If you have just moved to a new town, it’s helpful to rent until you decide which areas you might like to live in.
If you are determined to buy but want to stay in the same neighbourhood, it might be feasible to buy a cheaper home close to your rental property. Look for new developments where transfer costs are usually included in the sale price, and where you can expect to live for several years without major maintenance expenses.
To calculate what you can afford to pay for your own home, use one of the free online affordability calculators offered by most bond originators, banks, and estate agencies.
Courtesy of Sarah-Jane Meyer - Private Property