Living for rent or buying a home is a very acute issue in the current panorama.
If your job changes constantly, you depend on moving frequently and you need flexibility, then it is clear to you that renting is the most convenient for your situation.
Opting for rent is the best choice when your job requires periodic trips to different places, in this case renting gives you the flexibility you need.
Another aspect that is considered an advantage is the fact that in a rental home there are no maintenance and repair costs.
In most cases it is uncertain, in the monthly payment the owners usually approximate these “fixed” expenses for the maintenance of the home. Regarding repairs, some are directly arranged by the owner and others are assumed by the tenant.
Living for rent is advantageous for those who do not have enough savings capacity to choose to buy a home, but it is true that more than an advantage, it is the only option available to them, given their circumstances.
You may find best societies to live in and buy a home by consulting real estate agency like Tajarat properties.
Forced tenants – buy or rent a house.
In today’s market the price of housing is high, but so is the rent. With the crisis many people have become tenants after losing their home. A house they bought at an astronomical price, a mortgage that was too expensive from the opening costs to the minimum interest clauses, etc.
When you rent, you pay someone else’s mortgage, for a space that will never be yours, therefore the increase in the value of the home in the long run will of course benefit the owner. In addition, in many cases there is an increase in the price each time the contract is renewed.
When it is an advantage to live in rent
A rental is advantageous only if it is your only option at this time and if the price is reasonable compared to the price of a mortgage for an approximate value.
- You are or will be a TENANT.
- You need geographic flexibility.
- You do not want to take care of home maintenance expenses.
- You don’t want to strain to save.
- Fear of risk / future income commitment
It may interest you. Is it better to buy a home?
We are experiencing a rental bubble, logically the rent goes up the closer you get to the city. Living in the belt, in the nearby towns, makes housing quite cheaper but even so today the monthly payment of a reasonable mortgage is cheaper than the monthly payment as a tenant.
Available options? Sharing a home, renting a flat on the outskirts, getting a rental at a good price or rent-to-own if you plan to acquire a home in the near future. (Of course, before embarking on a rental with the option to buy, assess your chances of accessing a mortgage loan).
Second-hand home purchase expenses [What are they]
Next, we will see the expenses when buying a second-hand home, like the seller, you will have to pay a series of taxes and expenses.
These are as follows:
Notary – Notary fees apply to notarial fees and the amount notarized. The buyer has the right to choose the notary where the sale is formalized.
Registration – The costs of registration for the buyer also apply tariffs depending on the amount deeded.
Taxes – ITP or VAT
Taxes – you will pay ITP (Tax on Patrimonial Transmissions), a tax that varies according to the autonomous community, being for example in Andalusia, around 8%. Here you can check it according to the autonomous community. You will pay VAT if the house is new (10%).
Bonuses – House purchase expenses
This percentage is applied to the amount deeded and there are some cases in which reduced rates are applied if the home acquired will be a main home or a first home. Reductions of up to 50% of the tax will be applied in the following situations (which will pay 4% of the notarized amount):
- large families
- under 35 years
- VPO official protection housing
- People with degree of disability
If it is a financed home, that is, if we are going to take out a mortgage, we will have to add:
Second-hand home purchase expenses with mortgage – Appraisal, management expenses and insurance
The expenses when buying a mortgaged home are no longer as expensive as they were years ago, since there is an increasing supply from banks and since the new mortgage law came into force, things have changed.
If you buy a home that you have to mortgage, currently the maximum to finance is 80% of the deeded amount, so you must have enough to cover the difference plus the expenses listed above.
Shopping expenses represent only part of the savings you need. If you want clear accounts, look at what I need to buy a house in 2019.
Is it better to buy a home? [Practical case]
Let’s look at the pros and cons of buying a home.
To buy a home you need previous savings of almost 30% of the price. I mention this aspect for those who need to finance the property through a mortgage at the maximum percentage currently granted by most banks, that is, around 80%.
To this must be added the purchase costs that, depending on the case of each buyer, reaches up to 10% of the amount of the home. See expenses are here.
Suppose that right now you have savings of x and you plan to buy a flat or house in the near future. Calculate in reverse what house price you can choose with your savings.
If you have decided on a specific area, with the characteristics of the flat well defined from the beginning, then feel the current market and you will know if you have a chance of finding it or not.
Buy a house in 2019.
If you do not reach the average sale price in the area that you would like to live, you just have to keep saving while you wait for a bargain to come up for sale.
You can also go to rent in that neighbourhood and try it for a while.
It has always been thought about owning a home that buying a home is a way to save while meeting a basic need, that the home is for life and that it would never lose value.
After the crisis regarding the latter, the panorama has changed.
If yours is not commitment, you better live for rent!
That is where the ability and commitment to ensure the cost of a home ownership comes in.
If in your life there is any variable of the work, economic or even personal type, it will be difficult to have good planning, therefore committing to a long-term mortgage and maintenance costs will not be productive.
Owning a home requires a long-term commitment, predictable monthly payments, and increased responsibility.
It is not easy to pack and move, although depending on each case there is also the possibility of renting it while you do not live in it.
It is better to buy a house.
As the rental market presents itself, more and more people are considering owning again.Park view cityoffers exciting prices if you want to by a home.
We have had many problems due to the massive purchase of homes at exorbitant prices, with unaffordable expenses, the granting of mortgages practically blind and an increase in the same that in many cases exceeds 110% of the price.
Abusive clauses, monthly payments greater than 50% of family income and the outcome is well known to all. See what the IRPH clause is.
With fear in their bodies, many families are convincing themselves that it is better to rent, to avoid repeating history, but then.
What happens if renting is more expensive for me, even as expensive as owning a home right now?
How much do you pay for rent in the house where you live now?
Now a family with moderately stable income can afford to pay a mortgage, the amount of rent would certainly be higher.
If you are paying a rent of 500 euros per month and for buying the same apartment or a similar one, you would pay an approximate or even cheaper monthly fee, it is evident that it is profitable.
You save at the same time you live in it, on the other hand, as a tenant, you help pay the mortgage of the person who has rented yours. As simple as that.
For example, if your working conditions do not allow you to access a mortgage loan, but with the new law that has recently come into force, taking out a mortgage is not so expensive.
The problem with buying and renting is that the balance has been tipped in favour of rentals largely because of what has happened before.
It has touched us all closely in some way or another, but there is no reason to trip over the same stone twice.
If you have solvency for a mortgage loan, in addition, the amortization of the mortgage allows you to live comfortably, it does not have to repeat the same mistake, therefore buying would be a viable option.
Will you buy if?
You think that the home you own is heritage that can serve as a support for future investments.
You think that home ownership is a social advance.
If for you the fact of being an owner has a high emotional value that provides you with personal and family well-being.
You think that buying a home is a way to save in the long run and you have a low probability of geographical mobility.
Your working conditions are stable.
Whatever your case, at each stage of life the home we need changes, we prefer city or town, more meters or less depending on family members, travel savings, special preferences.