The question of a roof over your head can be classified as an age-old question. And every family, faced with the need to solve a housing problem, finds itself in a dilemma: buy an apartment or rent – which will be more profitable?
Pros of buying a home
- Guarantee of stability and confidence in the future.
- This is a reliable way to invest money – real estate in the world is only becoming more expensive.
- If you calculate the rental and purchase of housing for a certain period, the costs will be comparable. With one big difference: having paid off the loan, after 20 years you are left with an apartment, but if you rent, you are left with nothing.
- Everything is invested in your apartment, and not in someone else’s.
- There are no costs associated with moving and arranging rented apartments.
- The rental rate is always rising, and buying with a mortgage fixes the cost of the apartment.
- In Russia, buying a home allows you to obtain a residence permit and access to work and city infrastructure: kindergartens, schools, clinics and other necessary benefits.
Disadvantages of buying an apartment
- Binding to this specific place. You and your family members can no longer move freely if, for example, you receive a better job offer. You will have to live in the city in which you purchased your home.
- Stability is quite illusory and relative. It all depends on work, on the political and economic situation in the country, on the health of family members and other things. At the slightest fluctuations and changes in the above points, difficulties arise with the mortgage.
- In Russia, the overpayment for housing purchased with a mortgage will be 100%, or even more.
- A mortgage also comes with a number of complications if you suddenly need to move. Many banks charge additional interest for early loan repayment.
- The purchase and sale procedure requires not only money, but also time. It often takes several months to sell or buy an apartment and complete all the documents and registration of the property, while the tenant can notify the owner and move out quickly and without unnecessary hassle.
- The actual resale will be profitable only after the loan is repaid and when the cost of the apartment increases significantly. Only in this case the costs will be partially covered.
Pros of renting an apartment
Freedom of movement throughout the country and around the world. You can accept any lucrative job offer and move without regretting the money invested in real estate and without having to urgently (and therefore not very profitable) sell your home.
Basic calculations show that renting a home and saving for your own apartment is about 30% more profitable than purchasing an apartment on credit.
- They won’t always give you a loan, but you can always rent a home.
- Renting is beneficial for those who are inclined to change jobs. And those who do not yet have a stable family structure do not know how many children they will have and when.
- Those who rent housing can afford to buy a new car or vacation abroad. For those tied to a mortgage, such costs may be difficult to bear for 20-30 years. And this significantly reduces the standard of living, which is, as it were, postponed “for later.”
Disadvantages of renting a home
- Instability is one of the main disadvantages of renting. No one is immune from changes in the owner’s plans, because the contract is concluded for no longer than a year.
- When you rent a home, you have no guarantees, but you also do not have the disadvantages of owning a home.
So is it worth buying a home? It all depends on the situation. If you have partial funds to buy a home, are stable in your job and want to settle in a certain place, then buying is what you should focus on. If there is no down payment for an apartment, it is better to rent housing – it will be 2 or 3 times cheaper.
Use the tens rule, which is known in developed countries. According to this rule, the amount of rent for ten years must be equal to the cost of purchasing the home. If this amount is greater, then the property is worth buying.
If you don’t need guarantees and want complete freedom of movement around the world, rent a home. If you are used to establishing control over your life through savings and purchases, then take out an apartment on credit.
In Europe, most of the population lives in rented housing. This is considered the norm there. It is better to buy housing in Russia. Decide what to do based on your situation. But the intangible benefits of each option must be considered first.
We are ready to invite you to consider options for long-term, seasonal rental or purchase of housing on the Liveonriviera service. Our team works only with trusted agencies.