Renting Or Buying: A Brief Look at Both Options
While owning your own home is infinitely preferable to renting, it is not always a realistic option. Both renting and buying have their plus and minus points, and it may be that your personal situation determines which option is right for you. This article examines the pros and cons of both renting and buying property.
Putting down a deposit on your own house or apartment can be too expensive for many prospective homeowners. A deposit of at least 10 per cent is usually considered to be the norm, although you may be required to present a deposit of between 20 and 50 per cent. This is not the only expense to consider though, as you also need to factor in legal fees, estate agent fees, stamp duty and the cost of buying furniture and moving your furniture into the new house. These costs can be a significant barrier for becoming a homeowner, which makes renting a more feasible proposition. While the costs of renting a property may seem high, it can work out to be cheaper than buying in the long term.
Renting a property means that you can call on the landlord to fix problems such as a broken boiler or damp patches on the ceiling and do not have to tackle the problem yourself or arrange for someone else to do so. However, some landlords may try to cut corners when dealing with the maintenance side of things, so this is not necessarily a major advantage. In addition, being at the mercy of a landlord means that you could be evicted from the property with little or no prior notice if the landlord suddenly has to sell the property to raise funds. This lack of definite security is one of the biggest disadvantages of renting.
If you have saved up enough money to put down a deposit, you can enjoy the luxury of owning your own home once your mortgage payments are complete. This gives you the option of selling the property at a later date and means that the property can be seen as a financial investment once the mortgage is fully paid off. On the other hand, there is the possibility that your house will fall into negative equity and you could then find yourself paying back a loan that is higher than the value of the property.
Although you are responsible for fixing any problems within the property and paying for them, you are free to make changes as you see fit (which is not possible when you are merely renting the property from the landlord as it does not belong to you). You are also not reliant on a landlord to take care of any maintenance problems on your behalf.