Rent or buy, What do you prefer?

Should I buy or rent? We all want to live as economically as possible, but in the meantime the house prices and rents keep going up. What is your best option, considering your personal situation? Below we have made an inventory of all the advantages and disadvantages of buying and renting.

Advantages of renting

  •  You are not tied down. Often there is only a month’s notice on the lease. Should you decide to take a trip around the world, you can leave in a month.
  •  The landlord is responsible for maintenance and repairs. In other words, no bother with contributions to the owners’ association’s savings account or    having to pay vast sums of money for roof maintenance, for instance.

 

Disadvantages of renting

  •  All the rent money you pay is lost. You don’t accumulate any capital with your home.
  •  If you earn too much money to qualify for social housing, you can only rent in the private rented sector. These rents can be quite high.
  • Your rent can be increased annually. The rent increase depends of your joint household income and the annual rate of inflation. In 2018 the maximum annual rent increase is anywhere from 2.4% to 5.4%. In time, annual rent increases can amount to quite a bit.
  • Home improvement? The landlord is the only one who profits. You are not investing in the value of the house and you will not get your investment back when you leave the house.

 

Advantages of buying

  • Buying a house can stabilise your monthly expenses. You decide which option is best suited to your needs. Paying the same amount for the next 30 years, of paying more later when you are probably earning more? Not a problem.
  • Once your mortgage is paid off, the house is yours. You have no more housing expenses, leaving you with more money for other activities.
  • All improvements increase the value of your house: a new central-heating boiler, putting in a new floor, window frame maintenance, etc. It all makes the price of your house go up.


Disadvantages of buying

  • What happens to the interest rate once the fixed-interest period expires? Predicting that is tricky. It can cause uncertainty, but also offers the chance of lower monthly expenses if interest rates keep decreasing.
  • You have to pay for all repairs and maintenance. If you own a flat and it concerns the building, the owners’ association’s savings account will pay for it. However, you have to pay for all repairs and maintenance inside your flat. But remember: all improvements to your home will increase its value.
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