Own flat – rent or mortgage – which is better?
If you’ve come here, you’re probably looking for a flat for yourself or your family.
In today’s article, we’ll look at what pays off more: renting a flat or buying your own flat with a mortgage.
We will compare both solutions and analyze all the pros and cons of both solutions so that you can easily decide which solution will be better for you
How to make the right decision when choosing how to finance your own home space
Is the apartment better to rent or can I buy? That is the question. You can do a full financial analysis for this purpose, but is it always about money?
There are many reasons besides finance that support one or the other option, and these are usually decisive reasons. Definitely the reason to rent is a lack of creditworthiness, however, to the point. Let’s check all the pros and cons of both solutions.
Is rent of flat good for me?
Benefits of renting a house or flat
Renting an apartment allows us flexibility when it comes to changing residence. We do not like the district, the neighborhood, the apartment turned out to be too small? Or maybe we are not sure if we want to stay in this city? Rental, although the contract usually includes a notice period, does not limit us as much as selling a flat.
No (or limited) responsibility
Lease agreements may of course contain a clause to repair any damage caused to the flat, however, as life shows, landlords often don’t care about the flat. The lack of sense of responsibility and the need to take care of four corners results directly from the fact that I am not the owner.
Disadvantages of renting house or flat
No impact on the date of removal
When we rent an apartment, we have no influence on the decisions taken by its managers. The owner can also terminate the previously signed lease agreement and we must suddenly look for a new apartment. A sudden change in the owner’s plans also affects our lives.
No effect on the appearance of the surroundings
This is probably one of the biggest disadvantages of renting an apartment. No impact on our surroundings. We can not always put your furniture in a rented apartment, or paint the room in our favorite color. Increasingly, there is also a clause in the contracts that the apartment at the time of handing over the keys should look exactly like at the time of signing the contract and on stubborn, every owner could attach to something, because everything is worn out, even if we cared about the apartment as if it were our own .
There is also not much to count on the owners of the apartment when it comes to renovation.
Distance or cost of lost opportunities
This is a fee that often raises doubts. Is it worth paying others or is it better to spend this money on loan repayment? There is also a change in the transfer fee, which is regulated by the landlord and the market is still unfulfilled in our country. So often by paying a fee we can go out the same as by paying off a loan.
Is buying an apartment and mortgage good for me?
Benefits of mortgage over the rental
My property – my place on the World
Of course, if we pay installments regularly and pay bills, but certainly buying an apartment even on credit gives a sense of stability. The neighbor will not call the owner for a complaint of misconduct because he would have to talk to us.
Impact on my surroundings – I decide
Bathroom in black, and in the room a peach ceiling? You’re welcome. After all, it’s your four corners and you have the right to do whatever you like in it … as long as you don’t tear down the bearing walls without permission.
My flat – my investment – my value
Your own apartment is an investment. If we already have some savings on our own contribution, we will receive much better credit terms for the remaining part of the purchase. There is a good chance that after repayment of the loan, it turns out that the value of the apartment on the market exceeds the expenditure incurred by us for its purchase, including the cost of the loan.
Disadvantages of mortgage
Ball and chain
Paying back a loan can give us trouble, and it is certainly just a ball and chain. Despite the sense of privacy and ownership, the apartment will in fact be ours only when all debts to the bank are paid. So these are many years with a loan on the back and a soul on the shoulder, whether it is enough for the first, for a holiday or for a new washing machine.
Of course, when renting an apartment you also pay rents and you have to Include them in your budget. However, in case of a difficult situation, you can move to another place or negotiate with tenants
Problem with selling when moving
When buying a flat, we attach to the place in a way. It is of course possible to sell an apartment with a loan, but it is worth to hold off for at least 5 years so that we do not receive a income tax when selling real estate.
If you find an attractive job offer in another city or meet the person you want to move to, you will have to sell your current apartment.
This involves both time and costs. If you want to sell me an apartment quickly you probably won’t be able to get a good price.
The next problem may be that you will need to get the bank’s approval to sell the flat and mortgage
The fact is that renting an apartment gives you more freedom while buying an apartment gives us a sense of stability. In a rented apartment, refurbishing is not worth it, but we can adapt our own flat to our needs and comfort. On the other hand, loan installments may disturb our peaceful sleep for years, because the situation on the labor and real estate market has not been stable lately.
In the next publication, we will thoroughly calculate the cost of renting an apartment in a popular location, for example in London, in relation to the purchase of a mortgage apartment in this place.
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