buy vs rent a home – which of the two is better?

There is a lifelong debate – buy vs rent a home. There are people with strong views on both sides of the fence. I’m afraid I don’t have the right answer to this either. I will however share my views on this topic and let you decide which camp feels more like you. 

I’m personally a home owner so you can probably guess what I believe is better option of the two. Owning a property comes with a list of things to consider vs simply renting a place. 

rental home

I will start with rental homes. While I personally wanted to get out of this market I do understand why some people prefer this and stay in rental homes for many years. 

I will try to cover as many pros and cons as I’m aware of. The list is probably not not all of the points so I am happy for you to add your views in the comments. I will add these to the post to make sure the list becomes even more useful for future readers

positives of renting a property

One of the biggest things people mention when it comes to renting – freedom and flexibility. Many young people who are still in the process of settling with a job and location will likely be massive advocates of this. 

You have an option to move at fairly short notice and enjoy a bigger and better property if the one you live in stops delivering against your needs. 

Renting shared properties can also allow you to meet some really exciting people who can become friends for life. 

The other positive I will mention here – less headache and unexpected bills. As long as you know your right and have a decent landlord – they will fix all the problems you have really quickly for you. 

It is also worth mentioning – if there are any unexpected changes in your life, your contract will have a much sooner end date. Some of these will have an exit clause that might allow you to move on fairly quick. This benefit comes into play in situations where you want to change things in your life. This could be job related or potentially you wanting to move in with your partner.

potential issues with rental homes

It isn’t all rosy when it comes to renting though. One thing I personally wasn’t a fan of – the limits that were placed on me. If you decide to change anything about the property – you have to speak to landlord first. What’s worse – the money you spend on improvements are instantly lost when you move out. 

If you ever went through the long contact in details – you will know the numbers the restrictions there are. Not only changes to property can be tricky – having pets mostly isn’t welcome either.

Someone landlords can end up being really tricky to deal with as well. They might demand a lot from you while not being overly helpful themselves.

One other thing I would mention here linked to your landlord – their financial decisions. They can decide to move on and sell the property as well as increase your rent at certain point of the contract. All of these can affect you as a result.

Before moving into your new home you also have to find enough cash in your bank account to cover the deposit. This can often be a couple of months worth of rent. It clearly isn’t as big as a deposit for a flat is however something worth keeping in mind.

buying your own home

From reading the above I am sure you guesses that this was my preferred route. To be honest with you – the plan was to get on the property ladder ASAP. Renting was obviously my starting point as well however I wanted to get a place of my own as soon as possible. 

I will cover the positives I can see in owning a place but will also be honest about some of the negatives there are.

best bits of owning a home

What got me personally into buying is the fact that every single month I’m paying out my own equity. This in a way becomes an extra pot of cash in years time if I decide to sell and move on. 

While the above is exciting – there is more. As there is inflation (you can learn more about it here) my property gets affected as well. Not only I pay out equity in my own property but it also becomes more expensive over time. 

If you are looking at owning a home as a financial investment – please keep in mind that all investments can both go up and down in their value.

The next positive I found later in the process – my mortgage payments were actually less than the rents for similar properties in my area. The way I look at it – I’m saving on my rent every month while also a part of it is dripping into my own cash pot that I’ll be able to access when I decide to sell. 

Being able to change things around the property fairly easy can also be seen as a massive advantage by many. Making it personal and comfortable is exactly what turns your flat/house into a home. The last sentence is a massive cliche!

owning a home isn’t just all positives

One of the first things to do after buying a property – start building an emergency pot of cash. You never know when issues might struck and the scale of these. 

On top of that you always end up having to do something around your property. Some of you will enjoy a bit of occasional DIY but this isn’t for everyone. 

Currently, there is also a lot of uncertainty with interest rates as well. It is impossible to predict what sort of mortgage products will be available on the market when it comes to remortgage. This could force you to part ways with a significantly higher amount of cash each month. For some people it even might become a massive point of concern and lack of sleep.

And did I forget to mention the ridiculously high property prices? To get on a property ladder isn’t as easy as many would like it to be. Saving enough cash for a deposit can be a massive challenge on its own.

summary

When it comes to owning vs renting a home there isn’t an easy answer to which is better. It will most often depend on your personal circumstances, your goals and financial situation.

There are many benefits and trade offs to both. Often however rent can be seen as less hustle and giving one way more flexibility at the expense of opportunity to gain financially in the long run.  There is also a time commitment that should be taken into the account when it comes to buying your own home.