/

Friday, 7 May 2021

Rent or Buy - The Pros, Cons and Making the Right Choice for You

 **Collaborative Feature**

Moving into a new home is a big deal for anyone, especially when it is your first home or a home where you intend to start a family etc. There are so many things to think about when choosing your home such as where you want to live, how many bedrooms, commuting etc. But there is one other big thing to think about before any of that, will you be renting or looking to get a mortgage? Of course there are pros and cons to both so it is important to work out what is right for you in the long term.

As someone who has rented for over 10 years and is currently looking to purchase our first home, I wanted to share with you some of the pros and cons to both renting and buying a house to help you decide what might be best for you. 


Buying a Home


We often hear advice about getting on the property ladder and how important this is but there are many factors to look at when deciding if this might actually be the best choice for you. For many one of the main reasons they struggle to get onto the property ladder is cost. It is always advisable to visit a mortgage advisor if you are thinking of buying but you can also get a good idea using mortgage calculators such as those that can estimate mortgage affordability based on income. They will help give you a good idea of what you may be able to afford before you head in to meet any advisors. 

Benefits of buying - 

  • One of the biggest deciding factors for people choosing to buy is that by buying the home is yours. Once you have finished paying your mortgage repayments the home officially belongs to you and nobody can take it from you. For many people this offers a big sense of security and less financial worry as they get older. 
  • Mortgages are actually often cheaper than rent! Yes you read that right, in many places the monthly cost of mortgage repayments can be several hundred pounds cheaper than the monthly rental cost. This means it can be easier to keep up with repayments and leave you with a more money to yourself.
  • You can do whatever you please to your home without needing permission from a landlord. Of course if you are wanting to make and large structural changes etc you might need to seek permission from other places but when it comes to decorating, gardening and adapting your home to suit your needs it is completely up to you what you do with it. 
  • I touched on this above but for many people buying a home is massively about financial security. Owning your home means that when you retire you won't have costly home repayments or rent to make or be forced to move somewhere else. It is also security for children or other family as something to leave them when you do pass. 

Downside to buying - 


  • Buying a house is a big commitment and one that is not as easy to get out of as renting would be. Whereas with renting it is a simple case of giving a month or two's notice, if you own your home you will need to sell your home or find a way to cover the costs of it (which can be a lengthy process) before being able to leave or move. 
  • Unexpected costs are another big one when it comes to owning your own home. Once you own your home, everything in it is your responsibility. If your boiler breaks, you will need to fix it and this can come at any time. That is why is is always advisable to put money aside each month into a savings pot for unexpected costs which may arise when you own your home. 
  • You may need a large deposit to secure your property. Whilst there are ways around this, many mortgages require you to have a 5-10% deposit payment up front and for some people this can be a huge stumbling block before they even begin, even if they can definitely afford the monthly repayments!
  • Payments and prices can go up and down! The price you purchase your home for can increase and decrease this means that if you plan to sell in the future and prices have gone down, you could actually lose money on your home. The same applies to your mortgage repayments (dependent on the type of mortgage you have of course), but for some mortgage repayments can increase when your interest only period ends and the interest rates go up. 

Renting a Home


There are many reasons why but more and more people are choosing to rent rather than buying their home in recent years. People often talk of renting being a waste of money but there are actually many benefits of renting which is maybe why it has become such a popular choice for so many. 

Benefits of renting 


  • Flexibility is a huge draw when it comes to renting, especially if you are someone who moves around lot for work or who doesn't like to stay in one place for too long. Often landlords will only require one months notice before you can leave and you aren't tied down with a mortgage or house sale to deal with when you decide to move on. 
  • Whilst you of course have a responsibility to keep the home is a good liveable and clean condition, many of the large unexpected costs will actually fall to a landlord rather than you. This includes things like the boiler breaking, electrical issues, structural issues and ensuring things like gas safety certificates are up to date. All of this would fall down to the landlord to sort for you and so unexpected, large costs shouldn't occur for you. 
  • Smaller upfront costs are a big factor when it comes to choosing rent over buying. When buying a property you will often need a large deposit, usually around 5-20% of the homes value, however when renting it is much, much smaller! It is usually any agent fees plus 6 weeks rent up front which is much more manageable if you don't have lots of savings to turn too. 
  • Renting is a much quicker process than buying. It usually takes around 6 weeks (or sometimes even less) from first viewing a rental property to actually moving in. Whereas it can takes months and months of back and forth, legalities and forms before you can even thinking about stepping foot into a property you buy. This can be a huge benefit of renting if you are looking to move quickly or plan to move regularly. 


Downside to renting


  • You never actually own the home and this can be one of the biggest reasons people often feel uneasy or do not want to rent. Whilst the home may feel like yours whilst you are living there, regardless of how much rent you pay, you will never actually own the home and when you leave you have nothing physical to show for the money spent in rent over the months or years. 
  • Rent can rise at any time and whilst landlords do need to give you notice of this they can up the rent amount at any point meaning that you will either have to find the extra money or move out which can cause stress and worry. 
  • When you rent you will need to sign a contract and this will often contain a set of rules to follow. Whilst they definitely vary from landlord to landlord (and some are certainly more flexible than others), so will require you to gain permission before making any changes such as decorating. Landlords will often have strict rules around things like pets too so it is important to consider how these restrictions might impact you.


So as you can see there are plenty of pro's and con's for both and there really is no universal right or wrong answer. It really will depend of many factors including your eligibility, earnings and of course personal preference. One thing is certain though, buying or renting any home is a big commitment and step so be sure to take your time in making your choice and make sure you are totally happy before you commit to anything. 

Do you rent or buy? What helped you make your decision? 

xXx


**This is a collaborative post.**

No comments:

Post a Comment