Buy or Rent?
Renting is money down the drain and property is a great investment. But is it as simple as that?When you decide to leave the family home and get your own place, you're faced with a big decision - to rent or to buy? Of course financial circumstances may dictate that you don't have a choice. Let's look at the pros and cons of both situations.
Renting
You can rent a property from many different people - private landlords, estate agents, companies, even friends and family. Or you could choose to live in a flat- or houseshare with other tenants.
The advantages of renting:
- Flexibility to move out, depending on your contract
- Maintenance costs are the responsibility of the landlord
- Useful if you are only staying in an area for a short amount of time
- The money you pay in rent is gone forever
- If there is a problem, you have to rely on the landlord to fix it
- Although you live in the property, it is not yours, so you can't decorate it or otherwise treat is as your own
Buying
Buying a property is a serious undertaking. Most people borrow a large sum of money in order to own their own home and that money has to be paid back, one way or the other. If you fall behind on your repayments it can have major consequences. Having said that, owning your own place gives you freedom and, potentially, an investment that will only appreciate in value.The advantages of buying:
- The money you pay out goes back into your property
- Your property is yours to do what you want with
- The property may rise in value significantly
- Unless you are very wealthy, you are committed to repaying your mortgage
- You are responsible for the maintenance and upkeep of your property, which can be expensive
- Your property may fall in value
But if you want the flexibility to move around without being too tied down, then renting will be your preferred option.