Should you be buying or renting?
Should you be buying or renting?
When it comes to moving to a new home, there are a great many things you have to decide. Most importantly, you have to decide whether you can afford to buy. If you can you should still most certainly look at renting as both have their own advantages and disadvantages; but what is right for you? This article will equip with the information you need to decide whether you should be buying or renting.
You can do whatever you want with the property within the confines of a few limits.
Buying means that you are the exclusive owner with complete ownership and possession of the property. There is no one to tell you what you can or cannot do. For instance, you want to take up some renovation works. However, you cannot initiate any work which may affect your neighbours rights.
You do need to do repair works
You are not obligated to carry out any repair works in the property. The only thing you have to maintain is the “fabric” of the property. Meaning you have to keep the outer walls is good condition. However, if you ever feel the need to repair anything, you will have to bear the cost yourself.
It is an investment
If you ever want to sell it, it can make you some money if its value has increased since you purchased it. Even if you have taken a mortgage to finance the deal, the mortgage payment will eventually lead to you owning the property. Further, as the mortgage rate will be fixed, you are not left at the wimps of a landlord who may increase the rent at any point.
Why not buy?
Are you ready to settle down and set your roots?
Though you can sell the property whenever you desire, it will not be as easy as it could take up to 8 to 10 weeks. So be certain that this is where you want to live for a good part of your future.
You will incur a significant initial cost
If you are going to be buying, you will be requiring some legal experts and property experts to help you complete the conveyancing process on your behalf.
You may have to bear the cost of solicitor or licensed conveyancer fee, agents fee, possibly stamp duty, Land Registry fees, to name a few.
You may be requiring indemnity insurance policies to cover potential legal risks relating to your desired property.
Furthermore, you will have to arrange for a deposit of 10% of the sale price payable on exchange of contracts.
You can also make a loss
If value of the property ends up decreasing, you may be in loss if you want to sell your property.
Should you rent?
Rent may still prove to be a better option even if you can afford to buy. There are a number of factors you should consider when deciding in between these two options.
You can move on a short notice
Moving from one place to another is not difficult when you are renting. For instance, if your new job is on the other side of town and you want to get something closer. Simply give notice to your landlord and move into your next desired property.
No conveyancing costs
If you are buying, you will be requiring the need of specialists to help you in the process. Furthermore, you will have to bear the burden of other associated costs. For a better understanding, of the conveyancing cost, please see our information article.
Low initial cost
As compared to buying, you do not need to arrange for the sale price which no doubt is the largest expense in buying a property. You may be asked to submit advance rent, but other than that there are no initial costs.
You do not have to worry about repairs
If you are renting, you do not need bear the financial burden of carrying out repairs. For instance, if the boiler breaks or the property needs fixing or improving, your landlord will have to pay for such expenses. You will only be liable to maintain the common areas and the space you occupy.
Why not rent?
Sudden increases in living cost
In most cases, the rent will increase every year. In addition to that, you are at the whims of your landlord. He will fix the rent which you will be required to pay and he can do this at any time. You may also be paying ground rent and making contribution towards maintenance.
Sometimes it doesn’t make sense
You may also come across situations where the monthly rent is greater than mortgage payments. So if you can afford to buy, why not pay off your own mortgage instead of your landlords.
Limitation of how you can live
You will not have complete authority over how you can live. as you will be living under a contract which sets out your rights and obligations, you may be facing restriction such as consent of your landlord before you can make any changes to the property, no pets policy, guest limitation, to name a few.
The decision between buying and renting largely depends on your long term goals. The aforesaid points will provide you an insight into what you should be thinking about.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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