Deciding if you rent or buy a house can be a difficult choice, probably the largest financial decision you will ever make.
First you need to be clear on your goals, will this just be a place for you to live or you want this also as an investment? Rent or buy a house: Both have advantages and disadvantages. The answer largely depends on your situation and preferences.
The mere fact that you can afford to buy a house doesn’t necessarily means that this is the best choice for you. Buying a house is not for everyone. Let’s look at the pros and cons!
Rent or Buy a house: a short overview
| renting | buying | |
| Responsibility | Your only responsibility: paying your rent on time and inform the landlord when problems occur. | You carry the greater responsibility: you need to fix problems that come up. |
| Flexibility | Renting a house gives you the flexibility to move whenever you like (after minimum tenancy period). | Buying a house can get in the way of your flexibility. You can not just pick up and move. |
| Uniqueness | For most improvements you will need permission from your landlord (e.g. painting walls). | You can make any improvements you like (within building regulations). |
| Financially | Probably you need to pay the equivalent of a month’s rent upfront as a security deposit. | Huge investment. You need to have the first deposit saved up & make sure you can afford monthly mortgage payments. |
| Investment Possibility | Paying a rent doesn’t give you anything back for your investment. | Your property could increase in value after some time. |
| Good Location | Renting in a good location might be in your price range. | Buying a house in a good location might be too expensive. |
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