Buying vs Renting Property

To rent or to buy, that is the question…

We all need a place to call home, but often deciding which route to take isn’t always straightforward. See, there isn’t a one-size-fits-all answer to choosing to rent or buy a property as financial, circumstantial, and even external factors, such as the property market, will play a part in helping you to determine what’s best for you. 

We’ve looked at the pros and cons of owning and renting a home to give you an idea of things to consider before making that all-big decision.

Pros of owning a property 

• The monthly mortgage payment may be cheaper than renting as your mortgage is spread across a long period of time. 

• Security. Once your mortgage has been paid off, you have full ownership of the home and won’t have to worry about paying for somewhere to live.

• Peace of mind! If you are keeping up with your mortgage payments, you won’t have to be worried about being forced to move by landlords or the price of your rent increasing.

• If the value of your home increases over time, you could sell the house to gain profit.

• Want 10 pets? Want to jazz up and redecorate your home? Owning a property means that you have the freedom to do as you please without having to ask for a landlord’s permission.

Cons of owning a property 

• Owning a home is a big financial commitment - but that’s no secret. When you take out a mortgage you’re agreeing to make monthly repayments that often take years to fully repay, so it’s important to know that you’re able to afford it.

• Buying a property isn’t a quick process as you need to account for the time it takes to save up for the deposit and other associated costs, prepare all your paperwork, and look for a house.

• If you choose to move, the process of selling your home could take a long time and, if your house has decreased in value, you would sell it for less than you paid for it.

• It’s not just your deposit you need money for. You would also have to pay Stamp Duty, legal costs, survey costs, monthly bills, and, of course, your mortgage monthly. Not to mention, unforeseen costs such as repairs or if you wanted to renovate the property. 

• Falling behind on your mortgage payments could lead to strenuous consequences such as being in debt or your home being repossessed. 

Pros of renting a property

• The process of renting is much quicker than the process of buying a property.

• You aren’t committed to the property, therefore you have the freedom to move around and try new areas. 

• Found a leak or the boiler broke down? Your landlord is a phone call away and you don’t have to worry about paying for any unexpected repairs!

• If the property value decreases, you won’t lose any money or be affected.

Cons of renting a property 

• You won’t have a lot of control or security as your landlord can decide to evict you or increase the price of your rent.

• Your landlord ultimately sets the “ground rules” for the property which could limit you to what you can do with or at the property like subletting or having a pet.

• Renting ultimately puts money in your landlord’s pockets rather than going towards your own home. 

• If you choose to never buy a property, it means that you would always have to pay rent - yep, even when you’re retired!

The bottom line

Ultimately, when deciding whether to buy or rent a home it all depends on you. Your financial position, your circumstances, and your wants and needs. Therefore, with these advantages and disadvantages in mind, it’s important to reflect and not rush when deciding what is best for you at this current moment.  

The following is for general information and is not intended as a form of financial advice by Finndon or its representatives, nor the information intended to be relied upon by individuals in making any financial decisions.