It’s a big debate for many people in their 20s and 30s, and probably 40s very soon, to buy or to rent? People are putting themselves to task to get onto the property ladder, and bankrupting themselves to get the deposit. Squirrelling money away for years to have a property that they own, yet cannot afford to maintain makes you weigh up which is better, is renting a much more sensible option or does buying a home open you up to many more options?
There are many upshots to renting your property. The screening process is much less strict than when buying a home, and if you aren’t picky, you can get a place to rent through Gumtree without any bother. But the perils in renting your property are big ones. The first one is obviously the fact that the home isn’t yours, so you need to seek permission from the landlord for hanging a hook, and the damage that occurs, like wear and tear, could be liable from your pocket if you’re not careful. But it’s a question of the type of landlord you have. Some don’t bother their tenants, and it’s a perfectly symbiotic relationship, but if there are issues with your home and the landlord refuses to fix it right away, that can result in a mounting cost for you. It is likely to make you question whether you even bothered renting when you could buy! But with the personal quibbles you could have, the costs are laid out in a very clear way. The bond, rent, and bills are all you need to pay, and if you have a letting agency that deals with your queries, the chances are that they will chase up the landlord for anything that needs doing, which makes life easier for you. In essence, the real devil in renting a property is the amount of money you might feel that you are wasting. The cost of rent is more than a monthly mortgage payment, and if renting is the only available option to you at this moment in time, choice isn’t a luxury you can afford. In London, many people have rented all of their lives, and it is the only option they have. House prices are continually on the rise so much that the central population consists of millionaires and celebrities, with little room for anyone else. For so many people, the answer is plain and simple, renting is actually easier than buying. No credit checks, no hidden fees, and as soon as you have found a place you are happy with you don’t need to up sticks. After a while, you will barely tell the difference between owning a home and renting it.
Buying has its perks, of course. Once you have got onto the property ladder, you can turn the house into an investment. Maybe you wish to renovate the home and sell it on. Many people do this, as well as take part in the buy to let approach, where you become the landlord. This is a lot of responsibility, of course, and there are other ways around this, by either delegating responsibility or investing in a triple net property where the tenants are liable for the vast majority or all of the costs. This means that you don’t have to pay for things like essential maintenance and upkeep, which can be a handy saving for you. But before you can get onto the ladder, there is the small matter of credit checks, a deposit to save up for, and taking a long, hard look at your earnings. The more deposit you save, the lesser the monthly cost overall. It leaves you in a Catch-22 situation if you cannot afford a big deposit. A 5% one would mean that you are likely to have a monthly cost that would be financially cripple you. The only hope for so many in their 20s and 30s, if they want to put a deposit down, would be to rely on that age-old financial institution, the bank of mom and dad! But for many, this is not an option, which begs the question for future generations. Will they be able to buy at all? The credit check is always the bit everyone stresses about, but it is something that can be overcome. The problem with it is that it requires a lot of forward planning, a few years’ forward planning to be precise! As your credit check takes into account every aspect of your spending, you should really take a knife to any irrelevant spending. For those that are dead set on purchasing their own home, the fact is that many sacrifices have to be made. Your phone bill, your meals out, even that morning cup of coffee on the way into the office, they all add up and need to be cut out if you have any chance of passing the credit check to get the home you really want. This is what it takes now to get your own home.
If you really want your own home in the current climate, you need to ask yourself “what am I prepared to go through?” It is a bigger task than ever before to own your own property. The generations up to the early 1990’s that were able to buy their homes on a one person salary are left perplexed at how difficult it is now. The amount of hoops to jump through doesn’t make it an attractive proposition for many. Self-employed people are looked upon as unreliable in the eyes of the banks if they don’t have enough of a deposit to put down and have no choice but to rent. So it would seem that renting is still so widespread. It will continue to be commonplace for the foreseeable future unless house prices drop dramatically, which is not happening anytime soon. The people in their 20s and 30s that are looking for a permanent home in the modern house market better set their sights on smaller properties!
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