For those who are fortunate enough to be able to say they can afford to either rent a place to live or buy the property they want to live in, the question of whether to rent or buy cannot help but come up. Affordability is probably the main reason why people would perhaps have to choose to rent over buying because it really just works out cheaper to rent a place to stay than to commit to the upkeep of a property you’re paying off.
So if you can’t afford to buy a property, renting may very well be your only option, but you should be making plans to change your financial situation so that you at least have the choice between renting and buying. This is because as much as one option may make sense over the other in any given situation, it’s always better to have a choice.
How long do you plan to stay?
If you do indeed have a choice, the length of time you plan on staying in a specific area pretty much determines whether you should rent or buy. Naturally, it would make sense to buy if you plan on staying for a long time, with the duration of your stay approaching forever. So, if you’re planning to retire at a particular place, buying is definitely the better option. Besides, with the help of a real estate firm similar to finlay brewer, for instance, you can even buy a property in just the kind of locality or just the kind of neighborhood you want.
Needless to say, there are other advantages to buying as well, such as the fact that you can rent the place out if you ever have to move somewhere else. In this way, you can essentially have someone else pay off your bond as a tenant, as a good way to climb the property ladder.
So generally I’d say if you can afford to buy, then buy (and remodel to your taste by contacting professionals at Wilmington Remodelers- https://wilmingtonremodelers.com/). However, if you cannot, then don’t be sad because there are some advantages to renting as well, although renting should really only be a temporary solution.
These days, people say buying a house is cheaper than renting in the long run. That’s because rent is at an all-time high, to the point where paying a mortgage can be a quarter of the price. However, there are costs to homeownership to factor in before you can truly say you have made a savings.
For example, with a rented property the landlord has to handle the majority of repairs and emergency situations. Boiler replacement, calling in Florida pest control exterminators, and repairing flood damage are all problems that can be remedied by your landlord. As a homeowner you would be footing the bill for all of those yourself, there’s nobody else to hand the costs to. If you find cracks in the walls, a leaking roof, and broken floors, you will have to pay for repairs. Additionally, if you intend to sell your property in the future, you may have to spend money on improving the curb appeal of your property by creating a picturesque garden, installing proper lighting, and replacing damaged siding (if interested, see https://www.sidingcompanydallas.com/ for a siding company in Dallas).
Furthermore, other costs of home ownership include home security, home insurance, and any special fees you may have to pay for your land (e.g. private road and parking maintenance, leasehold fees, ect). In additionSo should you decide to buy instead of rent, make sure you factor in costs like these.
What the market is currently like
Generally the value of a property appreciates and it’s perhaps a well-known fact that property is one of the only assets which actually appreciates in value. The value you get out of that appreciation isn’t always what it’s made out to be however, so you might want to delay an outright purchase a bit to assess the markets so that you can perhaps enter during a much more conducive buying time. As much as property appreciates in value, waiting it out a bit to take advantage of a property bubble burst could make a strong case for renting over buying.
Another case which would have you choosing to rent over buying is if you already own a property and you don’t necessarily want to sell. This applies even if you’re still paying off a bond on that property, so long as that property is generating some or all of the money required to pay off the bond eventually.
Capital gains take things in a whole different direction and if you are indeed chasing capital gains over investing in property for cash-flow, you likely have large sums of money available in cash and so buying over renting definitely makes more sense in this instance.
Katie is a finance specialist with one of the biggest firms in London. From savings to investments, there’s nothing she can’t advise on and she’s here to help spread the word and help you on your way to financial freedom.