Turn the key, cross the threshold of the door and sigh. Home Sweet Home. The feeling of independence and tranquility that the gesture provides is hardly comparable to others, but is it really necessary to be an owner to enjoy it? Buying or renting is the eternal question And, unfortunately for many, there is no clear answer.
Although we are tired of hearing that “rent is a waste of money”, the truth is that there are many factors that would overturn that theory. The question, however, is subject to multiple interpretations, as many as the realities of each one, and it is precisely at this point that the difficulty in giving a clear answer lies. In any case, there are certain indicators that can help you decide.
The keys before making a decision
Renting or buying a home is a key decision that can shape our future. That said, it seems logical to think that must be a deliberate determination without hastes. The circumstances of each one will be key to tipping the balance towards one option or another, so before answering, at least three basic aspects must be taken into account.
– Each situation, a world. Motivation itself is the main driver of decision-making, whether it is buying or renting a house or any other circumstance that has to do with our day to day life. The personal situation can give clues as to which is the best option. Being single is not the same as being married and with children. Nor is it the same to look for a home as an investment than to do it to live a short season.
Preferences in terms of location, surface or access to services can also help decide, as can the available budget, employment situation or priorities.
– The economic effort. The economic chapter is one of those that contributes the most weight to the decision between buying or renting a home and that is that our economic capacity can significantly clarify our options. Buying a home implies having, at least, around 30% of the total cost to assume the expenses associated with the operation or completing the 20% that, in general, mortgages do not cover. But there is more.
Becoming an owner means assuming other series of extras inherent to a home: from repairs or maintenance costs, to furnishing its interior, through taxes, possible reforms, home insurance or similar. In the case of renting, most of these expenses are borne by the landlord. The difference, in the long run, is that the extra effort involved in a purchase translates into the ownership of the property, while the lease is still an investment in the enjoyment of the property.
In any case, the Bank of Spain itself advises that, the recommended income limit to cover the monthly expenses of a house should not be more than 30% -35% of salary both in the case of purchase and rental. Although the initial outlay and monthly expenses are notably lower in the case of rent, in the long run, the investments made in the home will be part of it. As we said, in the first case we will be investing in the enjoyment of it while, in the second, we will do it in its ownership.
– Your house, your home. Going down to the more earthly plane, buying also means differences with respect to rent in terms of interior design and decoration or, what is the same, with regard to making the property a real home. Buying allows a higher level of customization than renting And, in short, you will not have to be accountable to anyone if you decide to reform the kitchen or change the color of the walls, issues that, like so many others, will be more limited as a tenant.
Buy vs rent
There is no absolute truth and no universal correct answer to the question of whether it is better to buy or rent. However, being clear about what you want, it is possible to see what you need. In other words, setting your goals and possibilities will make it easier to get your decision right. The economic chapter is, for many, a determining factor and, unless you have enough savings to embark on the purchase, it usually tips the balance towards rent.
But if this issue is not a problem, there are other aspects to assess. Mobility, for example, is another one of them. The current labor market situation invites, in many cases, to change city or, simply, company. Buying a house can be a handicap when it comes to moving, while if you choose to rent you will have greater mobility. In the long run, distances to work, family or friends can also increase the cost of housing.
In general, buying a home is a good option as long as we find a property with an advantageous price and conditions with respect to the market (and our situation allows it); if we don’t have to apply for a mortgage; if we think about embarking on the decision as an investment or, simply, if we do not have moving plans. Rent, for its part, is interesting so as not to limit our mobility options, the possibility of investing our savings in other priorities while saving for the future or, simply, if we are not too clear about where we want to settle.