The debate over whether it’s best to rent or buy is one that is unlikely to ever go away; the reason being that there is no one clear-cut answer. With so many factors to consider, the truth is that both are viable options with pros and cons, meaning the decision becomes less about which is best, and more about which is more suitable to each individual.
To help identify the path that’s right for you, some of the biggest pros and cons for each option are listed below, starting with the advantages to buying:
- When you finish paying off your mortgage, the property belongs to you. This is potentially a very valuable asset, which can be sold on for considerable profit, or perhaps used to either set you up for retirement or to serve as a financial legacy you can leave to your loved ones.
- Since the property belongs to you, there are no third parties to go through if you want to make changes in terms of décor, renovation or building improvements. This gives you the freedom to put your own stamp on it, truly making your house a home.
- If you have a fixed-rate mortgage, it can be easier to map out your financial future, planning out your expenses and avoiding the nasty shock of rent increases and suchlike.
- Many people speak of a sense of pride and satisfaction that comes with being a homeowner, due to the sense of achievement and greater stability it can bring.
On the flipside, some of the disadvantages of buying include:
- A mortgage is a long-term contract, and you’ll most likely be paying it off over decades, which can feel like a burden.
- As interest rates go up, it’s likely your monthly mortgage repayments will too, which is something you need to be able to factor in.
- Responsibility for the property lies with you alone, meaning you may well have to fork out for repairs and the like.
- The housing market is susceptible to huge fluctuations, meaning that when you buy and sell can see you lose out on maximum equity gain.
Now with renting in mind, here are some advantages to consider:
- Rent contracts are much shorter, giving you greater flexibility in terms of moving up the property ladder or downsizing as and when you need to. This can also make it easier if you wish to relocate for work, as you aren’t tied down by a lengthy mortgage.
- Your landlord will be liable for repair and maintenance costs.
- The initial deposit will be considerably smaller than if you were buying, which means less time saving up beforehand.
And last but not least to mull over, some of the disadvantages of renting include:
- The property never belongs to you, leaving major decisions like adding extensions beyond your control.
- With due notice, your landlord has the right to evict you or raise your rent costs, which can force you out of a home you love, even if you don’t want to leave.
- As the property isn’t yours, there’s no possibility of selling it on, meaning that unless you’re able to meet your rent and save at the same time, you won’t accrue any money whilst you live in a rented home.