To rent or to buy a home? It’s clear to some, but others understand that each option has its advantages, which leads to doubts and indecision about whether to buy or rent. We’ll try to answer some questions you should consider.
To rent or to buy a home?
The decision between renting or buying a home can be one of the most difficult ones you’ll make in your life. In reality, neither alternative is better than the other. Whether you choose correctly or not will depend on some important factors that are essential to analyse in detail:
1. Personal finances
This is the determining factor. Buying a home means a huge outlay of money. In most cases, it will be necessary to finance a large part of it and it’s essential to have a good financial cushion. You have to take into account that bank entities in Spain tend to lend a maximum of 80% of the house’s tax value. So, from the start, you’ll have to pay 20%, to which you have to add administrative costs, taxes, etc.
2. Future prospects
Nowadays, worker mobility is a reality for many people. Unless you have a permanent or steady job, this is another issue that comes into play when it comes to deciding between renting or buying a home.
And not just because of worker mobility, you also have to evaluate what your goals for your personal life will be. For example, if you want to start or expand your family or search for a new lifestyle far from where you are, this has to be weighed in the decision.
3. Real estate market situation
The real estate market is closely linked to economic trends. Taking into account the short- and medium-term prospects for the sector may tip the scales towards renting or buying a home. Today, it’s easy to follow market trends. Spainhouses has a statistics section where you can check the weekly price trends for homes for sale and for rent throughout Spain.
4. Level of responsibility you want to take on
Buying a home can give you security and is an investment, as a time will come when the property is yours. But at the same time, it involves taking responsibility for it. Attending to the community if it’s a flat, fixing things that break, taking on a renovation in time, and other aspects of what it is to be a property owner that are problematic at times also have to be considered.
The final decision
Closely evaluating these aspects, the pros and cons, will determine your final choice. A decision about whether to buy or rent will be different for each person.
When to rent? Basically, when geographic mobility is a given, you want to have more freedom to change without any commitments, you cannot assume the initial expenses of buying, or you don’t want to be tied down to a mortgage for years. In terms of the latter, financial stability is important, given that not paying your mortgage could mean losing your home and the investment you made. As an alternative, there is the possibility of investing in financial products that offer good returns.
When to buy? When you have financial liquidity, buying a home isn’t an expense, but rather an investment. In the future, you’ll have an asset that will be an important part of your personal wealth and which may even have notably increased in value. Even in the case of geographic mobility, you have the option of renting the residence. This rent will not only cover the mortgage payment, but you can also obtain a bit of a profit from it. And, in the event you have to sell, the investment made up to that point won’t be lost.
You’re the only one who can make the decision whether to rent or buy a home, but Spainhouses can help you find the home you need at a particular time in your life or the house that will become your permanent home. Take a look at our search engine and start planning your future.