Buying a House vs Renting

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Buying a House vs Renting

To begin with you have to decide whether you wish to buy a house, and if you understand all the responsibilities and risks involved.

The following information should help you with your decision, by focusing on the key advantages and disadvantages of buying a house and of renting.

Buying a House

Advantages

• Becoming a home-owner can be seen as an investment. Assuming that over time you pay off    your mortgage, you are left with valuable asset.

• The freedom to make any changes to the property that you wish.

• You are not dependant on the landlord when it comes to maintaining the property.

Disadvantages

• The financial costs can be daunting, both in terms of size and complexity. As well as the    mortgage repayments there are many other costs to factor in, such as legal fees, estate agent    fees and stamp duty.

• You will have to finance any major repairs to the property.

• You are less mobile than if you were renting a property.

• Negative equity - If your house price falls, you may be repaying a loan that is worth more than  the value of your property.

Renting a House

Advantages

• The initial costs are much lower. Although a bond is usually required, there are very few other    up- front costs such as legal fees. If the property is furnished, this lowers costs further.

• It is far easier to change property. Many rent because it offers them the flexibility of relocating  with relative ease.

• The landlord is responsible for maintenance of the property.

Disadvantages

• Due to the possibility of eviction or non-renewal of contract, there will always be a certain sense of insecurity when renting.

• The money you pay in rent is passed to the landlord. Unlike purchasing a house, it is not    retained by you as an asset.

• If sharing a property, you may have conflicts with fellow tenants.

• Some landlords may attempt to "cut corners" when maintaining your house, which may lower the quality of your accommodation.

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