Rent or Buy: Making an Informed Decision

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Thank you for reading this blog. I will walk you through my thought-processes and the actions that led me to choose between renting and buying. Of course, you first need to realize that it is always a good time to buy property. However, renting is usually better if you are not looking to stay put and settle down in one place for at least 5-10 years.

Where Renting Makes Sense

If you are still uncertain about where life is going to take you next – a change of scenery, a relationship or a job – renting beats buying hands down. It will cost you less in terms of money, effort and time to break a rental lease than to rent out your home to another person or to sell it altogether. In the same way, since your landlord is responsible for repairs and maintenance of the property, you have less to worry about.

Where Buying Makes Sense

Buying a home, on the other hand, can actually turn out to be a great investment. However, it is a lousy decision depending on how the market is when you buy, and when you sell. Anyway, if you plan strategically and the market goes in your favor, it makes more sense to buy a home than to rent one.

Personally, I was advised by investments manager that it would suit me well to buy if, and only if, I planned to stay in the home for more than 5 years. This way, I would have enough time to recoup most of the upfront costs required to secure a mortgage and the back – end costs for selling and paying the property agent commissions that are atypical in such situations.

My Advice

My advice to you, therefore, is that you need to understand yourself well before you make the decision to buy or to continue renting. Either way, you can rest assured that it is always a great time to buy your own home.

Renting or Buying: How I Made My Decision

House owner/real estate agent giving away the keys - house out of focus

A couple of years ago, when I was on my second job and making a tidy sum every month, I decided to move out of my parents’ house and into a small flat in Leeds. Renting the place was great fun until I met a friend who was making less money than me but who had already paid the deposit on her first house. Talking to her made me reconsider my life choices and I decided to look into home ownership as a viable future plan for myself.

I am sure that you are probably at a similar crossroads now. You have been comfortable in your current home. However, the problem is that you do not own it – not really. Losing your job could lead to your eviction. This is also the case if you are unable to continue paying the rent.

However, before you get on the property ladder, consider the following. I will help you think about everything that comes with home ownership so you can make a smarter decision whether to continue renting or move into your own home.

When I decided to buy my first home, I had to pay various fees. I discovered that owning a home does come with a couple of expenses that I had already been informed of by my friend. As a renter, I did not have to pay these fees directly. These fees cover maintenance of the home, renovations, homeowner’s insurance, monthly utilities, and monthly common fees, among others.

However, renting also comes with its own costs. Apart from the rent, I also had to pay brokers. Additionally, there was also the opportunity cost on my security deposit. Although these expenses had a negligible impact on my financial situation, I decided that it was time for me to join the property market as an owner. This is why I opted to buy instead of renting.