Should You Buy or Rent Property? An Easy Guide to Help You Make the Right Decision
When it comes to finding accommodation, there are three main options that people can choose from – shared living, renting or buying a house/ apartment. While shared accommodation is quite easy to find and relatively cost-effective than other options, it is not really suitable for agreements of more than a couple of months. This leaves the accommodation seekers confused between the remaining two options, buying or renting a property.
So, should you buy or rent a property? There has been a long debate on this topic as property managers and real estate agents in different localities each offer differing views. Here, we have collected a few tips to help you compare the two schemes.
But before proceeding, you must first understand that there's no carved-in-stone answer to the buying vs renting dilemma. The right option is determined by your circumstances, the place you are moving to, real estate market conditions and various other factors on which the total costs depend.
With that said, take a look at the top things to consider when comparing buying and renting a property.
The Amount of Time that You Intend to Stay
If you are a student, a contractual worker, or any other person who needs a decent living place in a new city or neighbourhood for only a short period of time (for instance, while you complete your studies or work tenure), then obviously renting is your best bet. On the other hand, if you are moving due to your job and plan to stay for more than a couple of years, it's wiser to purchase a house or apartment even if it's a small one.
Your Needs and Requirements
Some people rush into buying a house with hopes that the property value will appreciate and so selling it, later on, will make them better off. If you are planning the same, then know that the costs incurred in buying and then selling a house typically amount to around 10% of the property's value.
In case the house's value only increases by a similar amount or worse still, depreciates due to any reason, then it can become a serious issue for you. Therefore, it might be safer to rent a house and if you wish to earn a little extra, then invest in other options such as managed funds, investments bonds and so on.
Do the Math
Last but not least, when comparing buying and renting, you need to properly work out the trends in property prices, the rent rates, and the total monthly costs of owning a house. Also, look into personal preferences, for instance, are you ready to bear the responsibility that comes with owning a house? Or would you prefer living in a rented place instead?
Deciding between buying and renting might require a lot of homework but if you really want to make the right choice, then you must bear a little pain to avoid regrets in the future.