Should I rent or buy? It seems to be the perennial question. But which is the best option for you?
Very often, it depends on your finances and your living preferences, as there are definite advantages to both. We’ve put together a straightforward guide to help you make the right decision.
Renting involves less responsibility
Perhaps the best thing about renting is the freedom that it provides. If you don’t own the property you’re living in, you obviously need to look after it. However, its maintenance is your landlord's responsibility, not yours. Unless you’re ready for a long-term commitment to one living space, you may want to select this option.
…. but buying a home makes it entirely yours
True, renting tends to involve far fewer responsibilities than buying. But the latter is a dream for many largely because of this main and, let’s face it, huge perk: if you buy a property, it’s technically all yours. So long as you’re able to stay on top of mortgage repayments, that is. If you feel confident in your ability to do this, why not go for it? Buying a home doesn’t have to be stressful, checking mortgage companies such as SoFi can be a big help to people wanting to get onto the property ladder.
Renters have more freedom to move
As you’ll most likely know already, renters must sign either a fixed or ongoing (otherwise known as “rolling”) tenancy contract. Once the fixed period is over, you’re free to move elsewhere. Likewise, you can cancel your periodic (rolling) tenancy — just note that the time frame for this usually varies on your type of contract and whether or not you live with your landlord. Renters, therefore, typically enjoy more freedom than homeowners. If you’ve bought a property, you’ll have to consider selling your current home before moving to a new one.
…yet buying offers a positive long-term investment
Buying a home offers potential benefits, the main one being increased equity. Put simply, this is the difference between the value of your property and your mortgage debt. If your home rises in value – say, for example, if the area you live in grows in affluence — your equity will increase. You could use this money for a host of worthy investments, from your retirement fund to buying a new property.
Renting can boost our confidence
Yes, you read that right: renting can improve our confidence, particularly if we’re sharing a property with strangers. Moving in with people we don’t know may seem scary — but as most people who’ve done this will stress, it often helps to boost our social skills. You and your fellow renters will have to work together to create a functional, pleasant domestic space. Once you’ve succeeded in doing this, you’ll likely feel as if you can do pretty much anything. And you’ll almost definitely feel more comfortable interacting with strangers.
…there is help available for hopeful buyers, though
OK, so maybe you’ve been renting for a while and have already reaped its many social benefits. People that are 100% ready to buy, but don’t have the funds for it, could apply for government help. The Rent-to-Buy scheme provides an equity loan, whereby the government offers a loan to first-time buyers for a newly built property.
If you’re seeking advice on buying your first property, you could always ask homeowners you know first. From exploring funding ideas to navigating the market, you’re guaranteed to gain useful insight from those you speak with.
There are benefits to both renting and buying — make sure to consider all the crucial ones before you make any decision. That way, you’ll be able to make the most of your money, in a property that works for you.