Making the choice to buy a property is probably the biggest financial decision you’ll ever make. Definitely not one to be taken lightly.
You’ve probably been told that buying a property is the way forward in terms of financial stability and you may feel under pressure to buy your own home to make that first step onto the property ladder. But is it really the best option for everyone?
We believe there are pros and cons to buying a house and that renting a property can be a smarter option for some.
That’s why we’ve put together this guide, so you can decide, once and for all; is it better to rent or buy?
The Benefits of Renting
Despite what older generations might tell you, there are many advantages to renting in today’s world.
Consider these before you dismiss renting as an option:
It Pays to Rent
The costs of buying a house can seem never ending. Hidden extra charges like paying for surveys, stamp duty and removal costs are enough to induce a panic attack. For rental properties, the upfront costs are pretty standard; a secure deposit, a month’s rent and any Letting Agency fees are all you’ll need to pay.
Once you’re in, the costs don’t stop when you own your own home. Recurring expenses like homeowners insurance and property taxes are just the start. Maintenance and repairs can really add up too. A dodgy boiler giving up in the middle of the night mid-November or a leaky pipe creating a downpour in your bedroom is all down to you to fix. If you’ve ever had to track down a tradesperson out of hours you’ll understand the pain.
With renting, these responsibilities lie in the hands of your landlord. Landlords have a legal responsibility to provide a safe, liveable home that is well maintained. This means the landlord foots the bill for any essential repairs.
Skip the Hefty Deposit
For first-time buyers, it’s becoming increasingly difficult to buy.
Soaring house prices have resulted in eye watering deposits that seem unattainable for lots of us. Finding somewhere to buy within a reasonable commute to work is almost out of the question, with people being forced to live in less desirable areas.
Although rent prices increase in sought-after locations, it’s far less drastic.
Flexible Housing for Flexible Living
In today’s world of employment, people switch jobs every few years and no one is quite sure what’s around the corner. If work decides to transfer you to the opposite end of the country or, worst case scenario, you lose your job, you could be left with mounting mortgage repayments. Selling is stressful, costly and always takes longer than you expect.
The pros of renting a house mean it’s easier to move quickly. Usually, tenancy agreements have a break cause and you could move somewhere new within a month with minimal fuss.
Scared of Commitment?
If you’re a commitment-phobe in your relationships, you might not want to be tied down by a property. Renting a home is the more flexible option, allowing you to jump ship if things get boring.
Renting could also be the intelligent choice if you’re moving in with a new partner. There’s nothing like a few months of living together to test a relationship. Discovering your partner’s unsavoury living habits could swiftly make you think twice about your happily-ever-after home. Toenail clippings behind the sofa or late night video game sessions could be the final straw.
The advantages of renting a house mean you can test each other out short-term, without the added pressure of mortgage repayments.
Stay Safe and Secure
As we mentioned earlier, landlords have obligations to fulfil when it comes to property maintenance. These responsibilities stretch further than fixing the odd appliance.
Safety standards have to be adhered to, such as gas, electrical and fire safety checks. These regulations are all designed to protect tenants.
Avoid Rising Interest Rates
Rising interest rates mean your mortgage repayments go up. If the budget is already tight, this could have grave consequences on your finances and living situation.
Equally, property values are famously volatile, and if the value of your property goes down it will be more difficult to sell later down the line.
Renting sidesteps these stresses.
The Cons of Renting a House
As with everything, there are some negative aspects to renting. It really depends on the stage of your life you’re at and what will benefit you now as well as in the long run.
Think about these issues before making your final decision:
Sacrifice the Freedom to Decorate
One downside with renting is that you’re more restricted when it comes to redecorating and making structural changes to your home. Alterations need to be ok’d by the landlord before they go ahead, sometimes even down to hanging a picture frame!
This isn’t a problem if DIY isn’t really your thing, and most landlords are reasonable when it comes to home improvements. You are enhancing their property after all.
If you have a pet you’ll need to make this clear at the beginning as living with pets isn’t allowed in all rental properties. It is possible to rent with pets, just make it a priority for your search.
Be at the Mercy of Your Landlord
One thing that can put people off renting is the idea of being at the mercy of their landlord. If they choose, landlords can raise the rent and even decide to kick you out.
Although this is a possibility, it’s a rare one. Landlords have to compete with the rest of the property market and if they charge extortionate prices they risk not filling properties. You also have a tenancy contract which will stipulate how much notice a landlord can give you if they decide to make changes.
Save Money in the Long Run?
Many people claim there is a long-term, financial benefit to buying. Once you’ve finally paid off your mortgage, they say, you will be able to live rent free.
But, how long will that take?
Mortgages that take up to 35 years to repay are not uncommon. That’s a long time to commit to.
In the short-term at least, it’s cheaper to rent. Rent is usually less than the monthly mortgage repayments and the original deposit is just a fraction of the cost of buying a house.
The Final Say
To sum up, it really depends on your specific situation as to whether it’s best to buy or rent.
Some things to think about before you buy are;
- Before making an offer on a house – can you afford the mortgage?
- Can you afford the monthly repayments (taking possible rises into consideration)?
- Are you planning to stay in the property for a significant length of time?
If it’s flexibility, minimal upfront costs and the security of knowing your landlord is there to cover maintenance you’re after, renting is the best option.
On team rent? If you let out your home, make the process as smooth as possible by taking advantage of No Letting Go’s inventory services. This way, you won’t get caught out with unexpected charges as all the information about the property’s condition is independently evaluated and stored securely. Whether you’re a landlord or letting agent, find out how we can help with our professional, unbiased property reports.
They’re the stuff of nightmares, sleepless nights, endless worrying and a bucket load of stress. No landlord wants to be caught up in a rental void period. Unfortunately, they’re pretty common and easy to fall into. This can be really damaging to landlords with a smaller portfolio. Thankfully, there are a few simple tips you can implement to avoid them altogether. Here are our 8 tips for preventing void periods. If you know of any more that could help other landlords, get in touch on Twitter.
1. Properly Maintain Your Property
So, let’s get this one out the way early. There could be an underlying reason why no one wants to rent your property. Ensure everything’s tidy, clean and in a liveable condition. Bathrooms and kitchens are key selling points of your property – do they need any work? Would a quick renovation boost your chances of attracting new tenants? The appearance of your property matters.
2. Advertise Everywhere (and Early)
It’s surprising to some but landlords do require marketing skills. Especially if you’re privately renting, you need to be able to market your property. Advertise your property everywhere you can, from local newspapers to online sites. If you want to stay away from void periods as much as possible, it’s important to advertise your property as early as you can. Don’t wait till the house/flat has been vacated.
3. Charge Reasonable Rent
Don’t inflate the rent you’re charging for the sake of it. Do your research and find out the average rent for the area. Then question how your property compares to the area’s average. Above all, charge a fair rent. You may be tempted to undercut the area’s average rent to ensure your property is seen as more attractive. Be warned, this could change the type of tenant you let to. Consider a deal including amenities if you want to make your listing more appealing.
4. Pick Good Tenants
This is a tricky one but will save you a lot of hassle in the long run. If you can let to good tenants you’ll reduce the risk of sudden changes in circumstance. Unfortunately even the best tenants can have unpredictable lives and there’s no simple way to get around this. Also, it’s very tricky to tell which tenants are genuinely ‘good’. Screening checks don’t tell the full story. The best tenants are steady and secure in their careers and lives.
5. Be Open Minded
It’s always important to have an open mind with potential tenants. Whether they’re looking to redecorate parts of the property or live with a pet, you may not like it but it’s worth considering. A tenant with a pet is likely to be more stable. Whereas a tenant who wants to redecorate will likely see themselves in the property for an extended period of time.
6. Why Not Try a HMO?
If you rent in an area popular with students or young professionals, it may be worth considering turning your let into a house in multiple occupation. You’ll need to adhere to specific licence rules about health and safety but it’s nothing a reasonable landlord couldn’t keep up with. This way, when one tenant moves out, you’re still making money from the other occupants.
7. Upgrade Your Furniture
Back to what we said earlier about how appearance is everything. If you’re offering a furnished property, it may be worth making a few extra purchases. Upgrading furniture will give your property a new lease of life. It could be the difference between attracting new tenants or not.
8. Be Approachable and Professional
Whether you like it or not, as a landlord you could be the reason between a tenant taking your property or not. If you turn up to a house viewing late, wearing sandals and shorts you’ll look unprofessional. Dress well, be prompt, appear approachable and ensure the tenant knows you’re professional.
When you start renting, don’t neglect the importance of a full and accurate inventory. Remove the possibility of disputes with No Letting Go’s inventory services.