When it comes to finding a new home, there are two main options. You can buy real estate, or you can rent a house or an apartment. There are pros and cons of leasing and purchasing properties, but many people find that one option suits them better.
If you’re unsure whether to rent or buy, here are some tips to help you decide which move makes financial sense.
The advantages of renting
Renting offers flexibility, and it also enables tenants to live in areas that they might not be able to afford if they were looking to buy. There’s also the benefit of being able to pass repair jobs and renovation costs on to a managing agent or a landlord or landlady.
The cost of renting is usually significantly lower in the short-term, as you don’t have to stump up a vast sum of money to sign a contract and move in. It is common, however, to find that rent payments are higher than mortgage repayments for similar properties.
Renting is an excellent option for people who aren’t ready to buy and those who can’t afford a downpayment or a mortgage. Leasing can also be beneficial for individuals looking for more flexible living arrangements and lower living costs. If you find an apartment for rent, you only have to worry about paying your rent and bills on time every month. Other costs, such as maintenance and repairs, are covered by the property owner.
The benefits of buying
The most significant benefit of buying is that it represents an investment. When you purchase a house or a condo, you’ll be paying into an asset that you own, rather than giving money to another property owner. Buying also gives you control in terms of what you want to do to the property, and there’s a good chance that you could make money on your home if you sell at the right time.
There are multiple ways of adding value to properties, for example, adding an extension or revamping the kitchen, and you might also find that your mortgage payments are lower than the rental fees for a property of the same size in the same neighborhood.
Buying involves a long-term commitment and you’ll be paying a lot more up-front, but it enables you to enhance the value of your estate and, hopefully, to make money on your investment in the future.
Which option is best for me?
There are advantages and disadvantages of renting and buying. If you’re in a position where you could buy, you’re ready to put down roots, and you’re tired of spending money on rent or living with friends or your parents, buying makes financial sense.
If you don’t have money set aside for a downpayment, your credit score is low, or you’re unsure where you want to settle, it’s probably best to rent for now. Before you make a final decision, weigh up the pros and cons, compare properties and take a good look at your finances.
If you’re ready to move, but you don’t know whether to rent or buy, hopefully, this guide will help you make your mind up.