When thinking about moving, it is important to consider every option before you make your final decision.
This applies to any options you might have in both buying and renting a place. Generally, people think that renting a house is more expensive in the long term than buying it. While sometimes this might be the case, at other times it is not quite accurate.
The thing is that you can’t make a snap judgment about how profitable something is if you haven’t considered all the variables. Those might include the area of your house, the price, if you are taking a mortgage or not, the APR (annual percentage rate) of your mortgage, etc.
Renting a place
While owning the place you live in might feel great, oftentimes renting a place will turn out to be more beneficial. These are several reasons for this. Owning and maintaining a house or an apartment is more expensive and time-consuming than renting the place as there are many costs associated with it which you won’t have while renting the place. If you want to buy a house, you will probably start by getting a mortgage to do that. Every mortgage comes with a price. You will pay interest as well as penalties if you ever forget or don’t manage to pay your mortgage monthly payment on time (sometimes you will even pay penalties when you pay too early). But the mortgage is not all, you will also have to pay for different insurance types depending on which country you live in. Apart from that, you will have to spend on maintaining the place which can turn out to be more expensive than you might have thought.
Moreover, when renting the place, maintenance won’t be your responsibility anymore. You won’t have to pay taxes, mortgage or interest payments. Before making a decision please consider all the possible costs of homeownership and then decide on whether you should buy or rent a place. Most of the time you will be better off renting the place.
Buying a house
Having full ownership of your home will bring you many benefits which you can’t enjoy with a rented place. You might be making mortgage payments every month but you are building equity, while with a rented place you just have to pay rent without getting anything in return.
Over time the real estate you own will increase in its value and if you decide to sell the property in the future you will get back the amount you’ve spent and maybe even more. What’s more, if you are getting a mortgage to pay for your home, you build up your credit history.
Both renting and buying
After considering all the variables you might come to a decision of renting and buying real estate at the same time. Turns out, if you are careful and your calculations are correct, you can even manage to live for free.
Let’s say you have an opportunity to buy a nice house for a family of 4-6 at a great price. But, at the moment you can also live in a smaller space. What you can do is to buy that house and rent it out while you rent a smaller apartment to live in. If calculated correctly, the tenants of your house will pay their rent which will cover the monthly payments of your mortgage and the rent of your living space. If the rent received from your tenants is not that much to cover both your mortgage and your own rent expenses, it will at least cover the monthly mortgage payment and you will be able to live at a lower or no cost.
These are all options to consider, but if you really want to save money, you should be careful in your calculations to make sure you don’t end up paying more than you’ve anticipated.