27November

Should You Rent or Buy?

This is a common question that people ask themselves when they are on the market for a property. Is buying a property the best way for me? Or would renting work out better? Buying a house is a long-term investment that could work out cheaper than renting, but it’s also one of the biggest financial decisions that you will face. There are a variety of factors that you need to consider before making the final decision of whether you should rent or buy a property.

In this article, we will be going through the benefits and drawbacks of both buying a property and renting a property.

Benefits of Buying a Property

Your Own Property – Buying a house means that you will be able to own a property. You can live however you like without a landlord placing restrictions on what you can and can’t do.

Money Goes Towards Your Home – With the monthly mortgage repayments, the money will be going back towards paying off the home and not into a landlord’s pocket. Once you have paid off the mortgage, the property is then yours and you will be able to live rent-free.

Increase Property Value – You can complete renovations and make changes to increase the value of your home. If house prices increase, then this could further boost the value of your home.

Drawbacks of Buying a Property

A long-term financial commitment – Buying a house is a long-term investment which means that you need to be 100% sure that you can buy a property. You need to be sure that you are able to make repayments, otherwise, you could be at risk of financial consequences, such as getting into debt.

Maintenance can be expensive – With houses, in particular, unexpected problems could happen at any time and it’s important to set aside some budget for maintenance expenses. Issues such as pipe leaks, broken boilers, and faulty electrics can happen.

Interest rates may change – Depending on if you take out a fixed-rate mortgage or a variable rate mortgage, interest rate increases can be reflected on your monthly mortgage repayments.

Benefits of Renting

Can be more affordable in the short-term – The main difference between renting and buying is that renting is often the more affordable option in the short term (depending on how long you plan on staying). Rental payments also rarely change so budgeting for necessities can be easier.

Usually a quicker process than buying – The whole process of finding the right property and renting is usually quicker than the process for buying a property. It can also be easier to move properties when you need to as it’s a faster process.

Repairs are usually handled by the landlord – One of the main advantages of renting is that the landlord will usually take care of the maintenance and repairs. These may be included in the monthly rent payment, but it’s a hassle that you don’t have to worry about.

Drawbacks of Renting

Rent Payments – One of the main disadvantages of renting a property, is that the money you pay will go to your landlord’s pocket, instead of towards paying off a home.

Living Restrictions – Some landlords may place restrictions on what you can and can’t do in the property, such as bringing in pets.

Not owning the property – When you are renting a property, the property does not belong to you. As a result, if the landlord decides to sell the property, then you will have to move out. Any home improvement tasks that you do could increase the property value, but this would only be beneficial for your landlord.

Factors for Consideration