Deciding whether to buy or rent is an important question. Many young professionals feel that renting is a waste of money, and that their money is better spent investing in a property that they will one day own, whilst others, who would much rather rent, feel under pressure to buy, which leaves them limited in their options and could eventually tie them down to a property that they don’t really want, need, or a property that is too expensive for them to maintain. Today we are going to go through some pros and cons of renting versus buying to help assist you in your decision.
1.) Job security & Career stability
Job security is more than knowing that you are working in a stable company, it is also about career choices: how long do you feel that you will be doing this particular job in this particular career in this area of the world? Are you done travelling? Are you positive you will not be seeking a career change in the near future? A mortgage is like a marriage and once you are tied down to your home, you will be responsible for paying that mortgage come hell or high water. And so if you are still ambivalent about any aspect of your working life, it may be better to wait until you are more stabilized before you make the financial commitment to paying a mortgage. Renting gives you options, you can upsize where you live, downsize, move around and leave for long periods of time without too much hassle.
2.) Space requirements
If you are thinking about buying a home, then you will be able to afford a certain level of space to live in. Is this enough for you? As a single person, it may be tempting to invest in a studio flat or a one-bedroom for example, but marriage, and children can mean that you will be selling and moving quite quickly. So before you commit to buying, make sure you are fully aware of how much space you need.
Another important consideration to make when deciding to rent or buy is with budget. Renting can help you to reduce costs in order to save, whereas your mortgage rates will be fixed for many years at a time. As most people will borrow the maximum that they can afford when it comes to buying a home, the repayments are usually quite a bit of a burden, leaving little savings. Renting, on the other hand, can be cheap enough to allow you the time to build up your savings, so that when you do buy, you have a good level of deposit.
Any problems that arise in a home you own are your responsibility, and this can be a shock to renters who are used to running to their landlord whenever there is a leak or a break in. Owning your home means that everything in and around that home is your responsibility, and usually that means expenditure, so only buy if you are ready to be responsible for everything from the electrics to the taps.