With housing costs skyrocketing, the question of what is more convenient, buying or acquiring, looms larger in our environment. However, the solution to this question is not presented in such a simple way. In reality, there is no single answer, as it will be subject to the particular and financial circumstances of each family.
Renting or buying a home, which is better in 2024?
The decision between buying or renting a home is more complex than it seems at first glance. Although the purchase gives you the property with the possibility of earning money in the future, an initial budget is required, generally around 20%, which can complicate the acquisition if those savings are not available.
It is highlighted that the feasibility of purchasing depends on the individual economic situation. If you have the necessary capital to down payment on a mortgage, especially around 20% of the value of the house, the purchase is usually recommended, arguing that the monthly mortgage payments are usually lower than the cost of rent.
On the other hand, leasing offers flexibility and requires less initial investment. However, although it is popularly said that "renting is wasting money", this does not apply universally. The choice between buying and renting should be based on each person's financial situation, needs and lifestyle. While some value the freedom and flexibility of renting, others see purchasing as an investment and a valuable asset for the future.
Important considerations when deciding between renting or buying
Historically, Spain has been recognized as a nation with a high proportion of homeowners. Although the percentage of people who choose to rent in the country is below the European average, this trend has experienced a change in recent years, attributable to the transformations in the mortgage sector.
To determine the best option between renting or buying, it is crucial to take into account various factors, with the economic and employment situation being one of the most notable aspects.
Savings available
Purchasing a home generally involves obtaining a mortgage. If you can pay in cash, the purchase is more convenient. However, if this is not your situation, to apply for a mortgage, you need to have approximately 30% of the value of the house saved (20% not financed by the bank, plus 10% destined for taxes and expenses), since that banks usually finance up to 80%.
Future plans, to consider to buy or rent
When evaluating the choice between renting or buying, it is essential to weigh your future plans, especially in terms of moving and job changes. If there is the possibility of relocating or your job involves geographic mobility, opting to rent may be more advantageous, since buying implies a long-term commitment to the mortgage linked to the property.
Know the market
To make the best decision, it is advisable to analyze the situation of the real estate market. If the cost of rent is increasing and banking conditions are favorable, it may be more beneficial to opt for the purchase.
It is crucial to note that the rental market operates under the "law of the fastest". Supply is limited, and quality properties at reasonable prices are leased quickly. On the other hand, the buying and selling market tends to be more reflective.
If you see a decrease in the prices of homes for sale, it could be strategic to wait and see if the trend persists, while you choose to rent. However, this approach carries the risk of missing opportunities, as the properties may be acquired by other interested parties.
When is it better to buy than rent?
Purchasing a home instead of renting can be considered a long-term investment. If you are wondering why you should choose to buy instead of rent, it is important to understand that, unlike leasing, where monthly payments do not translate into the accumulation of a tangible asset, mortgage payments contribute to the capital of a real estate. Over time, this asset can increase in value, potentially generating profits on a future sale. Additionally, once the mortgage has been fully paid off, it eliminates a significant monthly expense, providing long-term financial stability, especially during retirement.
Another advantage of purchasing lies in the freedom and autonomy that being an owner implies. Homeowners have the ability to customize, renovate or make changes to their property according to their preferences, without having to obtain permission from a landlord.
When is it more profitable to rent than buy?
Renting may be a better option than buying a home if:
- You can't get a mortgage: The costs associated with leasing are cheaper than the down payment to purchase a home.
- Frequent geographic mobility: For example, if you have frequent trips or long periods of work in different places, renting gives you greater flexibility to move and move.
- If you want to buy, but do not have the necessary financial resources or cannot find the home of your choice, opting for rent represents a favorable alternative.
If you are interested in buying or selling a home, do not hesitate to contact us at ventas@roses.net. We will help you with the entire process!
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