Renting versus Buying – Which One is Right for You?
Buying a house is a major financial decision that requires careful thought and planning. Some people opt to rent a flat or house if they are not yet ready to purchase a home. Renting and buying each has advantages and disadvantages. Find out which one will work for you at this time, because the right option will depend on your personal circumstances.
Benefits of buying
- When you buy, you are paying for a home that will be yours after some time.
- If the property’s value increases, you could use its market value minus the mortgage debt that can help you fund a larger property or comfortable retirement.
- You have freedom to do to whatever pleases you to the home without asking a landlord.
Potential downsides of buying
- It is a huge commitment that can affect you for a long time.
- Your monthly payments can increase when interest rates increase.
- There are maintenance costs you should be prepared for.
- Upfront costs are higher compared to renting.
- Selling the property can be a challenge especially in an unstable market.
Benefits of renting
- Lower upfront costs.
- It is easier to move house if you have to.
- Finding a home is easier.
- Your landlord shoulders repairs and maintenance costs.
Drawbacks of renting
- All your payments go to your landlord, not to an asset that can be yours afterwards.
- Paying rent can be difficult if you are out of work.
- You are not free to make improvements and always need to seek your landlord’s permission.
- Rental fees can go up as decided by your landlord.
Are you ready to buy?
When you think about owning a home, your first question is whether you can afford it or not. Expenses you should be prepared for include deposit, survey fees, stamp duty, removal costs, and legal costs, aside from monthly bills. You can find out how much you can afford by looking at your income and expenses. Future changes should also be considered. This is your capacity to pay the mortgage in case interest rates increase or any event happens in the future that can affect your expenses. It helps to learn about your options in financing a new home.
On the other hand, if you think renting is best at the moment, you should expect to pay council tax, service charges and utilities aside from the monthly rental fees.
There is no right or wrong answer between renting and owning a property. The right solution depends on what works best for you. It involves personal circumstances, not necessarily financial issues and market conditions. Perhaps for your job, it would be more practical to rent a property for now if you have to move from one place to another. Still, owning a home is a good investment you should plan on. In case you are looking for houses for sale in Hornchurch or other towns near London, it’s best to work with reputable agents.