Should I buy or rent?

Should I buy or rent?

‘Should I buy or rent?’ is a question that most people will ask themselves in life. While buying a property can be very expensive it may actually save you money in the future and many prefer the flexibility that renting can offer. A property is one of the biggest purchases that you’ll ever make so ensuring that you’ve made the right decision is crucial. However, deciding whether to rent or buy can be stressful. Sure, being a homeowner may be hugely rewarding but if you know that you won’t be able to afford monthly mortgage payments, it might not be the best idea. Here, we take a look at the pros and cons of each decision and help you answer the biggest question of them all.

The benefits of buying a property

As a long-term investment, many believe that buying a home is cheaper than renting. However, you should only choose to buy if you know you can afford it.

• Your monthly payments go towards purchasing your property, instead of a landlord’s pocket

• Once you’ve paid off your mortgage, you will own your home in full

• If you decide to sell, you could make money if prices rise

• You are free to live however you like, and don’t have to follow rules set by the landlord

• You can renovate and redecorate without asking the landlord

• Monthly mortgage payments may seem scary, they will just feel like any other regular bill. Plus, if you’ve already been renting a property, it’s just like having your monthly rent taken out

• Owning a home can offer you financial stability in the future; whether you want to sell and upgrade or give funds to loved ones

The disadvantages of buying a property

• As well as the price of buying the property, you also need to consider mortgage fees, survey fees and additional hidden extras

• If you have a joint mortgage and separate with that person, selling the property can be very tricky

• Unless you have a fixed rate mortgage, interest rates could mean your monthly mortgage payments could rise

• You need to have money set aside for repairs and emergency issues such as a leak or broken washing machine

• It can take a long to sell your home

• There are financial consequences if you fall behind with mortgage repayments such as being in debt, bankruptcy and your property being repossessed

• When it comes to selling your property, while prices may rise, there’s a huge risk they could also fall

The benefits of renting a home

• The moving process is often quicker when it comes to renting so if you need to move with speed, renting may be the best choice

• If the property value reduces, you aren’t at risk of losing any money

• If any repairs are needed, the landlord will pay

• You could rent a home in a nicer area than you can afford to buy in

• If you find yourself moving for work or prefer the option of leaving at any point, then renting offers flexibility

The disadvantages of renting a home

• Your monthly payments will go to the landlord instead of towards a home, leaving many to describe it as ‘throwing money down the drain’

• The landlord could decide to sell and you would therefore have to move. Even with notice period, this can be a very stressful time

• You must obey all rules within your tenancy agreement, which could state no parties or animals

• The landlord can restrict any changes to the décor of the property

• Your rent could increase

• Monthly rent in some locations is high and at the end of your tenancy, you have nothing to show for your time there

How to decide

The decision to rent or buy a property should come down to your financial and personal circumstances. While there are plenty of reasons to support each choice, only you can make the decision. However, ask yourself the following questions. Can you afford a deposit? Will you be able to afford mortgage repayments? How long do you envision yourself staying in the property? Compare this with the option of renting and you’ll have your answer.

If you would like to speak to an expert at Cassini Properties Estate and Lettings, please get in touch today.