There comes a time in life when you are in a position to buy your first home but this doesn’t mean that you should! For some people renting is the better option; for others it’s right to buy. But how do you know which is the right option for you?
Check Prices
If you think you’re ready to buy then you need to take a look at the houses on the market and what price they sell for. It may help to see a financial advisor first to establish how much you could borrow.
You’ll then be able to see what properties are available in your price range.
In general you’ll get a better property when renting; you’ll need to decide if the houses you can buy are appealing enough to you;
When considering house values it is worth looking at what auctioneers such as Cscerri Auctions have on offer. There can be some great deals if you’re prepared to do your research and take your time.
Pros & Cons Of Buying
The monthly payment when buying is usually less than the monthly rental cost. However, you will be liable for all maintenance and repairs. This means you’ll have unexpected bills that can stretch your budget; usually at the most inconvenient time.
However, on the plus side once you’ve paid off the mortgage there will be no monthly payment and you’ll be financially secure as you’ll own the house and can sell it if you need a large chunk of money.
It is worth noting that selling your home takes time. If you’re likely to need to move in a hurry then buying may not be the best option for you.
You should also consider the property market. If house prices fall, as they are currently doing; you may not have enough equity to pay off the mortgage and may be trapped in your home.
Pros & Cons Of Renting
Renting can actually require you to pay a significant sum of money up front. This is the deposit and at least one month’s rent before you can move in. This can be a sizeable amount of money to find and not that much less than the deposit for a house!
However, if you’re renting you’ll not be surprised by maintenance bills on your property; your landlord will need to take care of all of these bills.
It is also much easier to move when you’re renting; simply hand in your notice and you can move out as soon as the notice period has expired.
Of course the major downside of renting is that you’ll never own the property; this means you’ll have to pay rent for life and can’t use the property as a retirement income.
The decision as to whether to rent or buy will be personal. It will depend on your financial position and what you are hoping to achieve in the next few years. If you think you’re going to need to move within the next 2 or 3 years it is usually not a good idea to buy.
