If you’re looking to move, you must decide between Rent or Buy. Which option is right for you?
Whether to Rent or Buy? that is the question.
Many people dream of buying their first home – it’s a milestone they must reach to be called a true adult.
Not everyone can afford to buy a home.
Consider the benefits and drawbacks of buying and renting.
Buying vs borrowing
If you have your own house, would you be happier living there, or should you live in someone else’s?
Buying a house means you are permitted to modify it as you wish, within reason.
When you’re renting, most things, even putting up shelves and painting walls, require permission from the landlord.
Renters often cannot bring pets or children to the apartment, so starting family life is difficult.
Although, renting gives you the flexibility to move after the minimum tenancy period has expired.
(Suggestion Also Read the Difference between Freehold and Leasehold )
Mortgage vs rent
This is a big deal. Your monthly mortgage payment is a considerable percent of your interest payments. This is what makes it so difficult to pay off.
In contrast, renting ensures you the freedom to move since you can lower your rent if your circumstances change.
In addition, you have a greater choice of where to live.
Perhaps buying a house in a desirable area is out of your price range, but renting it might be possible.
Renting, on the other hand, is like spending money that does not return anything in return. It’s why it’s called “dead money”.
It’s okay to rent if you prefer that over purchasing a house. Living in a nicer home may seem a better investment.
However, depending on where you want to live, paying your mortgage on a monthly basis might actually be cheaper than renting.
Although house prices have increased significantly in the last few years, the average rent has also shot up while mortgage costs have come down.
Thus, it is worth comparing the average cost of both options to decide which one works best for you.
Savings vs investment
You might need to put down a deposit if you want decent mortgage rates.
In order to qualify for the government’s Help to Buy scheme, you’ll need at least five percent of the house’s value.
Saving for a larger deposit will lower monthly repayments, but this may take some time.
The initial deposit acts as an investment in the house that could increase in value over time.
Here are some tips to get you a down payment.
Renting a house or flat doesn’t require a large down payment, so getting in is easier than saving beforehand.
Generally, a bond of one month’s rent is required upfront.
The £20,000 deposit you saved for a down payment could be spent on holidays or a new car, for example.
A deposit for the house often serves as an investment, as time goes on the value of the house could increase.
Responsibility vs. freedom
When you buy a house, you take on great responsibility. So, if there’s a problem with your boiler or roof, then you’ve got to fix it. This can sometimes come with a massive price tag.
It’s your landlord’s legal responsibility to ensure this kind of problem doesn’t occur while you’re renting. Renting vs owning a Home always difficult to decide.
Getting a tenant might be more appealing if you’re not comfortable doing DIY, or don’t have the money to pay for these kinds of repairs.
But when you rent, you also have to deal with the landlords as legal owners. If they decide to sell the house, you’ll have to move out.
Rent or Buy
Choose the option that best suits your circumstances and your budget.
Your decision will have pros and cons, and as your circumstances change your needs will change as well.
You decided to stay in Rent or Buy, then a comprehensive guide to tenants’ insurance can help you figure out what is right for you. To become a homeowner, you need to figure out how much you can afford to borrow and how much you need to save.