Buy or rent property
Many people are keen to get on the property ladder and believe that owning a house is a better long-term investment when compared to renting. Making the decision to buy or rent a house is difficult as there are many factors you should consider. Your current financial situation, family needs, lifestyle, location, and long-term goals are factors you should consider which may ease the decision-making process.
In this blog, we will outline 3 important questions when deciding to rent or buy and explore the advantages and disadvantages of buying and renting a house.
3 key questions to ask yourself before renting or buying:
Are you financially stable?
Are you planning to stay in this property for more than 5 years?
Can your budget handle mortgage taxes, maintenance, and other costs?
In general, if you are financially stable, planning to stay in the property for 5+ years and if you can handle all upfront, ongoing costs and hidden costs, then buying a house may be a better option for you in the long-term.
On the other hand, if you cannot commit to living in a particular property for an extended period, due to work commitments such as having to travel abroad, then renting may be a more suitable option for you.
Benefits of buying a house:
There are several advantages of buying a house which include:
You will have a sense of security as you would not be forced to move by a property owner.
You do not need to ask for permission for renovation or to have any pets.
You could make profit if the value of your property increases over time.
Disadvantages of buying a house:
You may have to pay for any repair such as leaks and other maintenance costs.
If you do not pay your mortgage on time, you may face bankruptcy.
Rent may be cheaper than paying mortgage.
Benefits of renting:
Renting is an excellent choice for flexibility - if you must travel for your job, you would not be tied down to one place.
You can also live in a better area – without additional costs that homeowners have, you can afford a better area as you have lower monthly costs.
If repairs are required, especially if you did not cause the damage, then you would not need to pay for repairs as it is not your responsibility. Repairs or alterations, however, may take longer as you will have to wait for things to be fixed, but may be worth the wait as you can save money.
Disadvantages of renting:
You will be making large monthly payments to the property owner.
No control over annual rent fluctuations – the property owner may increase the rent as they feel necessary and if there are no regulations to protect you, you might have to find a new place to live.
You will not be able to re-design or make changes to the property without permission from the property owner.
Renting or buying a house is a personal decision – think about your current financial situation, your long-term goals and weigh up the benefits and the disadvantages of both options before making your final decision.
If you are certain that you are happy to stay in a particular place for many years and have all the necessary finances to cover all the upfront and hidden costs of owning a home – buying is the option for you. If, however, you believe you may like to travel or do not have the finances to own a home now – renting would be more suitable for you.
If you need any property advice, please do not hesitate to contact our team at Ladybird Living Ltd.
T +44 (0)203 488 1488