01/12/2017

The pros and cons of buying or renting your home.

This is one of the most frequently-asked questions by future customers in the real-estate market. In the long run, does it make more sense to buy a house or to rent? In today’s blog we analyse what each option entails.

Let’s start at the beginning: How long will you live there?

If the answer is ‘forever’, or at least that is your intention, then there is no doubt that buying is the best option. Therefore asking yourself this question will define your starting point, viewing the acquisition from the perspective of a long-term investment, or perhaps as offering you the possibility of eventually having a property that you own.

Buying a house: Is now the right time?

In broad terms, one of the key factors to be taken into account if you are thinking about buying a house is that you must add a whole series of costs to the purchase price, corresponding to the conveyance and the formalization of the mortgage as well as other costs deriving from legal advice, notarial fees, and insurance. Being clear about this will help you to get organized.

Meanwhile, the current situation offers very favourable conditions for buying a house:

  • Rental prices have reached record levels this year, and furthermore this sector is currently experiencing a lack of supply of properties for this purpose.
  • Good economic prospects for the country and for the real-estate sector, in which investment is increasing. In addition, mortgage interest rates remain at an all-time low of 2.2%.
  • The reinstatement of new direct assistance for house-buying envisaged in the draft New National Housing Plan.
  • Another reason in favour of buying is that in the event of a change in the owner’s circumstances, the property can always be rented out in order to generate

Renting your home: greater mobility.

  • Requires a lower initial investment compared to buying a house.
  • The procedures to be gone through are quick, where the future tenant is looking for a temporary solution.
  • Tenants are exempt from certain tax duties such as property tax, service charges, or maintenance costs, which are payable by the owner.

However, the rental sector is suffering on two fronts, first from a lack of supply of properties for rent, and second from considerable price inflation.

Take advice, do the maths, and analyse the pros and cons of each option; do not rush into any decision, but above all, keep dreaming about your new home!

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