CasaHub: Rent or Mortgage? What is more advantageous in 2024?
Certainly, each of us has analyzed the housing aspect, where we encountered the most important question – to take out a mortgage, assuming the obligations to pay the installments, or to rent a living space – thus enjoying the opportunity to move at any time. Which of the options is more profitable in 2024, more efficient, and more comfortable? Below, we will try to analyze all the pros and cons of each of these options.
About the quality of life
So, apartments and houses are most often offered for rent by individuals for a specific period, but this does not give tenants the guarantee that after a month the owners will not want to sell the space, accommodate relatives, or simply no longer offer it for rent. Thus, the impossibility of planning for an extended period is one of the strong arguments in favor of opting for a mortgage, as it is directly connected to the quality of life and stability of an individual. At the same time, tenants understand very clearly that in the absence of guarantees, there is a high probability that they will have to leave the residence, and for these reasons, they do not invest in repairs, changes, quality household appliances, or new furniture, and as a result – many rented apartments hide entire lists of "problems."
About finances
Now, thanks to online calculators, it is very easy to calculate the difference in payments between mortgage installments and rent. If we analyze two similar apartments – the rent for a two-bedroom apartment in the city center starts from 600 EUR/month, and when purchasing a similar space on mortgage, payments will be from 700 EUR/month. Thus, after a period of 10-25 years, upon full repayment of the mortgage, the property will become individually owned, and the differences between the amounts paid in both cases will not be so significant. Thus, the mortgage represents one of the most stable and efficient investments in 2024.
About the advantages and disadvantages of renting
+ If there is no amount for the initial down payment – lower monthly payments provide the opportunity to set aside part of the income in a separate accumulation account;
+ Mobility – the opportunity to move to another residence very quickly without any commitments or needs for repair and arrangement;
+ A wide variety of offers on the market in any sector of the city in the immediate vicinity of public transport, workplace, parks;
+ Payment withholdings can be negotiated with the landlords;
- Sudden price increases and the lack of any guarantees;
- Conditions imposed by landlords – starting with living rules, prohibition of rearrangement, replacement of furniture and appliances, and the requirement to vacate the residence;
- Frauds and financial schemes, offering the space for rent to several people simultaneously, non-compliance with the condition of the space, hidden defects, or refusal to enter into an official contract;
- Lack of investments – saved money can be devalued by inflation.
About the advantages and disadvantages of the mortgage
+ Quick procurement and move to private space, planning installments, which offers the opportunity to manage income more efficiently;
+ Efficient investments – every year the price of real estate is increasing, so at the eventual sale of the property, the obtained amount will exceed the cost of procurement. Moreover, investments in real estate are a hedge against inflation, especially now;
+ Independence – from the first day after the purchase of the property on mortgage, you have the freedom to arrange it according to your preferences, modify appliances, furniture, and the overall design;
+ The difference between monthly payments and rent is not so significant, but in the case of a mortgage – you pay for your own property. Moreover, the property can redeem itself if it is rented out.
+ The very large number of announcements from professional real estate agents and agencies, who accompany you through all stages of procurement, offering legal consultations. Besides, there are state programs that provide support to certain categories of citizens, such as the "First House" financing program.
- The necessity of paying the own contribution for the first installment, a minimum of 20%.
- Variable APR, which can decrease or increase depending on the country's economic situation.
- Long-term settlement in a certain area, so it is very important to take into account all aspects – public and social transport infrastructure, traffic jams, the possibility of constructing new buildings or other structures nearby, availability of parking spaces, as well as the quality of construction materials used and the quality of work.
- Financial discipline – each day of delay in payment can lead to penalties.
Conclusion
Certainly, there is no correct answer to this question and it is based solely on individual priorities, but by analyzing all the pros and cons mentioned above, making a decision can become a bit simpler. Find a wide variety of apartments for rent and sale by accessing OFFERS FOR RENT AND BUY.
