Moving home can be an exciting yet stressful time in your life, and aside from looking at the kind of place you’d like to live as well as things like the location and whether you want to live in a house or an apartment, there’s always the question of whether it’s better to buy or rent your place.
Whilst there’s no right or wrong choice between renting and buying, there will be a choice that’s right for you depending on your current circumstances, but that doesn’t always make it an easy decision, so in this post, we’re going to hopefully help make it a bit easier for you by giving a good list of pros and cons for each so that you can clearly see which option best fits into your life right now.
Buying Pros:
You may be tied into a monthly mortgage which can feel like a huge commitment all on its own, but once you’ve paid it off then you own your property outright, so this is a huge benefit of buying a place compared to renting where you’re just paying off someone else’s mortgage.
You can move up the property ladder and secure your retirement pretty easily by selling your house after a few years if the value has increased and using the extra money towards a bigger place.
You have more freedom to carry out any renovations or decoration work that you’d like to do without having to ask a landlord for permission if you own the place, plus you’ll actually get the full benefits of them compared to when renting a place and are, not only limited in what work you can do, but in being able to enjoy the benefits of the work you do and also have it add to the overall value of the property for when you come to sell it later down the road.
The cost of a mortgage payment each month is typically less than rent, so even if you’re not sure about the financial commitment of buying and taking out a mortgage, then you could actually be saving yourself money in the future and right now by paying less towards the cost of something that you’ll own outright in the future.
Buying Cons:
Buying a place is a huge commitment financially so you need to really make sure you’re able to afford it and that you’re ready for all it entails – if you have any doubts about this, then it could be wise to wait a while and even look at other financial service types to see if there are other ways you can look at investing your money.
Interest rates can and will fluctuate, so it’s important to be aware and prepared for this as it can affect the overall cost of your monthly repayments.
Unlike when renting, you’re fully responsible for any maintenance and repairs that need to be done on your property, so especially if your property is an older one, then this can quickly mount up and add on to the extra costs each month even if you’re saving in other areas.
It can get complicated if you’re living with someone and own a property together and then you break up because if both names are on the mortgage then you’ll perhaps need legal advice to decide who gets to keep it or if you want to sell and split the money you get back.
If you own a place instead of renting it then you have less flexibility when it comes to just getting up and going somewhere else like you would when you rent a place, which can be a bit inconvenient if you have a job that requires you to move regularly or if you just like to travel a lot, and in this case it could be better for you to rent a place until you know where exactly you plan on living for the long term.
When buying a place, you’ll have more additional costs up front such as surveyor, lawyer and even tax fees that may have to be paid that wouldn’t be required when renting.
Renting Pros:
More freedom and options if you decide to move when you want to without having to worry about finding a buyer or renting the place out and losing money – you can just hand keys back which is great if you don’t enjoy being tied down to one place for too long or know that you’ll have to move a lot.
You’ll not be responsible for the costs of repairs – your landlord will, so it can save you a lot of unexpected expenses or ongoing costs that repairs would be, especially if your property is an older one that requires more things doing to it.
Renting Cons:
You may have less choice over where you get to live compared to the choice you’d have if you were buying a place because you may need to choose something you can afford versus the area you’d like to live if they don’t have a lot of properties available.
Renting can cost more than what you’d pay for your mortgage each month, so although there’s more flexibility, your costs could be higher overall.
You’re paying someone else’s mortgage when renting, and although you’re definitely getting a lot of other benefits, if what you’re looking for is an investment, then renting may not be your best option.
You’re going to be limited to what you can do to the property in terms of renovations and decorations since it will be something your landlord has to give permission for and even if you’re able to do anything then it’s, not only going to cost you money, but you’re not going to see the return on investment in the same way as you would when you own the property such as adding value to it.
Hopefully, this post will help you see that although there’s no right or wrong choice between buying and renting, there are different aspects of each decision that may be more or less relevant to you that you should take into consideration when making your decision.