House - buy or rent?
And here we are again at the sweet blog, the sweetest blog online.
And today, we would like to discuss One of the most well-known issues when it comes to housing.
House - rent or buy?
It is important to note that the preference for one option over another is not only due to economic matters. There are other components, such as peace of mind and so on. In this article, we will discuss them all.
Below, we will review the pros and cons of each option and ultimately express our opinion on the matter.
And as always, at the end of the article, there will be a refreshing infographic presentation to summarize its content for you.
Ultimately, stability is one of the essential things in life. And no element is more related to the concept of stability than your home (check out our article regarding the deep essence of the "home" term).
Let's take a not-far-fetched scenario.
Your landlord comes to you and asks you to prepare for eviction because his son is looking for an apartment or something, and he decided to live in the apartment you currently live in.
It is doubly complicated when you have children studying in educational institutions nearby, and you also need to be reorganized on the subject of schools.
A house bought by you belongs to you, not to anyone else. And no one can get you out of there for no reason.
Stability is definitely a key factor
Stability is also reflected in maintaining your and your family's sense of community.
If you do not frequently move due to rental issues, you will, presumably, maintain family stability and be part of a stable and happy community.
Therefore, the issue of stability is significant in aspects of this issue, and it stands as a big advantage in favor of buying a home.
The fact that you do not have to be in constant pursuit of an apartment search and you are well-planted in your place can give you tremendous peace of mind.
Rent - unstable.
Buying - very stable.
2. A sense of worth.
"The instinct of ownership is fundamental in people's nature."
Said the American philosopher William James.
There is something special about this sense of ownership. Something to do with a deep understanding of worth.
We do not claim that a person who does not own things lacks a sense of worth. That's not our intention. We are only trying to say that there is positive energy in owning an object. And it's super relevant when it comes to buying a home.
Unfortunately, This is not the case when you don't own the house.
Unlike a rented property, In which any repair you want to make requires the landlord's approval. When the property is yours, You and you alone will decide when and how to fix or add things.
If you feel like changing the color of your home for no particular reason, you can, of course, do so. These are your walls. It is the house!
This sense of worth will undoubtedly contribute to your peace of mind.
A sense of worth as a mental booster
Indeed, even in renting an apartment, you can achieve a certain sense of value, certainly if you rent for the long term and invest in the visibility and quality of your apartment. However, with that being said, still, deep in your heart, you know that this is not your home.
He's someone else's.
Check out this article, and you will be able to enrich your knowledge a lot when it comes to feelings related to buying a home and what that sense of ownership means.
Rent - a limited sense of value.
Buying - a powerful sense of value.
3. Economic benefits.
Although it is clear that there is a strong disagreement among economists regarding the question of - is it financially wiser to rent an apartment all your life rather than buy one with the help of a mortgage (like most people),? Our two cents on the matter are that purchasing an apartment is more financially wise.
'Why'? might you ask.
Well, After an in-depth analysis of the issue, we concluded that the reason for the 'long term rental' opinion over a purchase with a mortgage is the insight regarding the investment alternative with the money used as an "entry payment." - The amount of money you bring to the bank when you come to apply for a mortgage. Which usually includes all your life savings. It is typically equivalent to a quarter of the total amount - For the mortgage transaction to be even possible in the first place.
This insight argues that instead of entering into a long-term, full-interest, and "heavy" deal with the bank and taking out a mortgage, it is much better to invest the same amount and invest in something with the most solid return possible, thus earning more. And easily.
What will cost you less?
The problem with this argument used by many people who support the long-term rental idea is that most people do not have that amount of money in the first place. And most of them "kill themselves" with other risky loans and so on to get it. So since they don't have that initial amount, the financial investment issue was never relevant to them in the first place.
But suppose one simplifies this question and leaves it as a "pure" idea that puts renting a long-term apartment against buying one, In our humble opinion, Even in that case, it is still quite clear that the purchase is much more economically worthwhile. After all, when somebody rents an apartment, he "throws in the trash" every month the rent money that goes to the landlord, as opposed to buying an apartment, when in such a case, every month, his mortgage buys him another small piece of the house by repayment.
And yes, we know that during the first years, they only pay interest.
We are still standing behind the buying argument.
Rent - Money is thrown in the trash every month.
Buying - brick after brick, in the end, the house will be yours, and you will leave it to your child without debts.
The massive burden on anyone who has taken a mortgage is a well-known fact.
The crazy interest rates, the increased pressure at any delay in payment, and of course, the great fear that following a surprising life crisis, you will run into financial difficulties that will not allow you to meet the bank terms, and thus, your dream home will maybe be taken away from you.
And although we don't want to be party-wreckers, it's important for you to know that in most cases, in the first years after buying your apartment, you will mainly pay interest.
It sucks, we know.
Read here for more about known difficulties regarding mortgage payments.
The fear of falling into such a situation
Rent - No mortgage. Fun Fun Fun!!
Buy - Can someone shoot me, please?
Another important point many supporters of the long-term rental idea are waving at (and rightly so) is the day-to-day responsibility for home maintenance.
Generally speaking, when you rent an apartment, any repair required that is not due to unreasonable use will be at the landlord's expense. And on the other hand, if you own the apartment, surprise, surprise - all these expenses are entirely on you.
So get your checkbook ready.
Who will fix my sink?
By the way, If you are renting an apartment, read more here about the frequently asked questions about when it is your responsibility to repair and when it is the landlord's responsibility.
The matter varies from region to region, but the principles are pretty simple.
Rent - fewer expenses for maintaining an apartment.
Buying - You are the one who has to pay.
In conclusion, we have listed above all the main arguments that usually arise in any "buy or rent" dispute.
In the end, and after including all the arguments for both parties, our opinion, As already hinted above, is that if you have the financial capabilities, it is better to buy. And not only due to financial reasons but also Because of mental and emotional aspects.
For you and your loved one.
And if you have already come this far, do not forget to jump to our collections page.
What are you waiting for?