Buy or rent: how to decide?
Is it better to buy a house or be the tenant? It is unfortunately impossible to generalize. Although investing in the long term can be considered more advantageous than renting, the best choice must take into account your budget and your lifestyle. Rent or buy, discover the advantages and disadvantages of these two options.
Buy or rent: the impact on your wealth
Depending on whether you decide to buy or rent a property, the impact on your wealth will be different. Before making your decision, consider comparing the expenses of a purchase and a lease . In the case of rental, your monthly budget for the property will include rent and charges as well as the housing tax. Do not forget to take into account the indexing of the rent in your calculation. In case you choose to remain a tenant, your expenses will remain stable over the years, so you can regularly build savings
If you choose to buy a property, the monthly budget will be based on the value of the property minus your personal contribution, the loan term and the interest rate. To this budget are added the expenses related to the building (in case of purchase of an apartment), the housing tax, the property tax, etc. Not to mention the notary fees, payable at one time. In the case of a purchase, current expenses are often higher during the first years and then stabilize. Once the loan is repaid, they become less than those resulting from a lease. In case of purchase, the real estate will, in all probability, acquire a value over the years. So you can expect to make a profit if you want to sell it in several years.
Buy or rent, the geographical location of the property can tip the balance. In some cities, it's better to buy than rent. In others, it will be the opposite. Ask about the price per square meter when buying and renting before making your decision.
Rent or buy: the advantages and disadvantages
Renting a home has two main advantages. First, it allows the tenant to maintain a certain freedom compared to the rented property. Unlike a real estate purchase, the commitment is minimal. The duration of a lease is relatively short and you can terminate it before term (sometimes with the payment of penalties). By renting, your capital is not fixed. The rental is ideal for people who have to move frequently for business reasons. It is also for anyone who prefers to invest in travel and leisure rather than in real estate. Another advantage of renting is the speed of the process. Unlike those required for a purchase, the steps to take are relatively simple. However, the feeling of "throwing money at the windows" is one of the major disadvantages of renting. In addition, as a tenant, you will always be dependent on the wishes of the owner. So if he decides to sell, you will be forced to move.
The purchase of a property also brings its share of advantages and disadvantages. Investment in real estate is considered a safe and sound investment. The purchase is suitable for anyone looking for financial security. It also allows to build a heritage that can be bequeathed to your children. The arrival of a child is also part of the events that push to invest in real estate. By adjusting the duration of your loan, monthly repayment of a loan and payment of rent are equivalent. The difference is that in the long run you will own the first one. In addition, under certain conditions, buying allows you to benefit from aids and various bonuses. In the end, the budget invested in a property is less important than that spent on a rental. To buy is not without drawbacks. Even if brick is a safe bet, you are never immune to fluctuations in the price of real estate. That said, as long as you're doing good, it's not really a problem. Finally, the purchase of real estate is a major investment. Your money is somehow stuck for several years. It may be necessary to tighten your belt during the first years and adjust your budget for holidays and recreation.