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Buying Vs Renting
19 February 2013
It seems as though it’s getting a little bit easier to buy at the moment, the government and mortgage providers have little incentives for
first time buyers
and the ease of getting a mortgage is rising. But is it worth it?
I want to make sure that if you are looking to buy an apartment or a house you know it’s definitely the best and most financially secure thing to do.
The pros of buying your own home are quite obvious: The property is yours; you can add value to the property with alterations and you reap the benefits; if the current market value of the property rises after you buy it, you are quids in; your mortgage payments are paying off what will eventually be yours completely.
But the cons are never outlined before you buy that dream home: Along with your mortgage payments you have insurance,
, interest and maintenance costs, this could end up being higher than the cost of renting! If the housing market crashes and your house decreases in value, you still have to pay the amount it was originally bought for, or if you have to sell your house you lose money. With the current economic climate the security of a lot of people’s jobs is a hazy one, what if you lost your job? You would lose your house and all that time, effort and money would be wasted
My mum always tells me I need to ‘
get on the property ladder
’, and in some ways I want to but it’s just such a huge decision to make! I found this nifty little gadget online which may help you in deciding whether or not it is financially better to rent or buy:
Rent Vs. Buying
If you rent, let’s say a 1 bedroom apartment in Manchester City Centre, you are probably looking at paying £700.00 for a decent apartment. That money doesn’t pay off anything; it just goes straight to the owner of the property. You then have to pay council tax, which is about £120.00 on top, and then water and electricity, another £200.00 per month plus £60 for internet and digital TV connections you are looking at paying over £1000.00 per month easily. But if you owned that apartment and lived in it, you would be paying exactly the same. Yes, you would be paying your mortgage off and you would be able to decorate whenever you want but, let’s face it, city centre apartments are finished to near perfection with high class bathrooms and kitchens that wouldn’t need changing for a long time!
My personal opinion is that the best option is ‘Buy to Rent’. Get a good deal on a 1 or 2 bedroom property; there are tonnes of repossession properties going up at ridiculously low prices and if you snap them up with a low mortgage, you could easily make a good few hundred pounds after covering your mortgage by renting it out. This is advice we have given plenty of our landlords and they still thank us to this day. As long as you get a good managing agent, such as
We Let Properties
, to ensure good tenants and top rents you will be laughing all the way to the bank.
BUY TO RENT!
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