If you’re looking for somewhere new to live, the decision whether to rent or buy can be a big one. For some people, getting onto the property ladder is a priority, whereas, for others, this is less of a concern. Renting and buying can both work, depending on your needs and priorities. Do you want to rent or buy your home?
Owning vs Borrowing
When deciding whether you want to rent or buy, you need to think about whether you want a home that belongs to you or if you would be content living in a property owned by somebody else.
If you choose to buy a house, you have more freedom to make improvements, renovate or expand. When you rent, you will usually need permission for most improvements or changes, including things like painting, and your landlord may not always agree to let you change things.
Some landlords also don’t allow pets or children, so you may not be able to make the life choices you want. However, renting gives you a lot more flexibility to move on than you would have than if you owned a house. This can be great for those early in their careers who may locate, or young couples undecided on where they want to live long-term.
Rent vs Mortgage
A mortgage takes a long time to pay off because your monthly mortgage payments also need to cover the interest as well as the loan itself. Renting gives you more flexibility if your circumstances change, as you can find somewhere with lower rent.
Renting can also offer more choice of where to live. Buying a property in a desirable area might be unaffordable for you, but finding a cozy house for rent in the same area could be much more affordable.
However, paying rent every month is money out of your pocket that doesn’t give you anything in return for your investment. For some, this can feel like a waste of money, but others are happier living in a nice place that they don’t own than living somewhere less nice that they do own.
It’s worth looking into costs though, as, in some areas, monthly mortgage payments could be about the same or even cheaper than the cost of renting in the same area. House prices have risen, but rents have also soared, while the cost of mortgages has dropped.
Extra Cash vs Investment
If you want to be able to get a good rate on a mortgage, you will need to put down a deposit. If you’re able to save up enough to put down a larger deposit, you’ll be able to reduce your monthly repayments, but saving up this much could take a while.
Renting a property doesn’t have the same level of up-front costs (although you will need money for admin fees and a deposit), so it is much easier to find somewhere to live without having to wait so long to save as much money.
Not needing to save up as much money frees up more disposable income for the short term. That deposit could be spent on something like a new car instead.
Freedom vs Responsibility
Buying a house means taking on a lot of responsibility. If anything goes wrong with a house that you own, like the boiler breaking down or a pipe bursting, then it is your responsibility to fix it. These repairs can end up costing you a lot of money.
If you’re renting the house, then your landlord is the one who has the responsibility to fix and pay for any issues with the property and any fixtures that they have provided, such as fitted appliances.
If you’re not good at repairs or don’t have the spare finances to make repairs, then being a renter can be much better. However, that lack of responsibility does come at a cost. As the landlord owns the property, they can also decide to sell it without your agreement.
Buying vs Renting
Neither option is better than the other. The right option for you is the one is that best fits your circumstances and budget. Both options have advantages and disadvantages, and your needs may change over time, meaning that while renting might suit you now, buying might be a good idea in the future.
Before deciding, take a hard look at your budget and think carefully about your priorities. Can you afford to buy? Do you want the responsibility of owning a home?
