Renting a flat vs buying one

Oct 19, 2018 by

It is often the case that the dominant view is that it is more profitable to buy a property, even if you have to support yourself with a loan than to rent it for years and in the future “have nothing of it”. In reality, however, it is impossible to give an unambiguous answer to the question: is it better to buy or rent a flat? It depends on a whole range of factors, i.e. the professional and family situation as well as its needs, plans for the future, and even the character or ability to “cope with finances” and their planning.

Deciding on the future of housing is one of the biggest and most challenging life challenges that each of us will face at some point in our lives.

I will now try to explain what you need to know to be able to assess whether in your case it would be better to rent or purchase a property on credit.

When taking out a loan for a property, we must remember that buying a flat that is too expensive and finishing it to an excessively high standard – all on credit, with no savings, which would allow us to cope with possible complications during the period of its repayment. There are many such stories and, as you can easily guess, they don’t usually end well. They are the best proof that when making such financial severe decisions like the purchase of an apartment, one should not be guided by the imaginations and expectations of the closest environment, but instead rationally look at one’s present situation and ask oneself whether we can cope with it. Renting a property, especially if you are single and you do not plan to start a family in the coming years, will be the most advantageous and convenient option for you. If there are already or soon to be children in your relationship, it may be better to buy real estate on credit, which will provide stability, but know that there are significant simplifications, and when making decisions about your future housing, you need to analyse a whole lot of financial and non-financial arguments. In the further part of the article, we will take a closer look at these arguments, which will allow us to clarify what is worth and what is not.

Buying a flat – arguments for and against, i.e. is it worth it? You are serious about buying your apartment, but have you defined the reasons why you intend to take such a severe step? Look carefully at the most common arguments for buying a condo, turn off emotions, and evaluate objectively which of them fit your situation. Maybe some of these arguments, after more in-depth consideration, will turn out to be unimportant or even misguided and unnecessary for you. Buying a flat is a good investment – after all, the value of the property will grow. The apartment will be for your children and grandchildren. The loan installment and rent can differ in amount – even in your best national banks, the loans can have horrible rules of payments. Always look if there’s a better option for the loan. Nevertheless, it is better to build the capital and invest in your apartment.

I want to have children, so I need to have my own flat?

My friends have already built houses, they have bought apartments, so maybe now it’s time for me?

You can always buy a used motorhome and live as a happy, independent hippie, but when kids come into play, this cheap option of accomodation won’t really be an option. But if you don’t plan to start a family you can consider this as a plan B. Or as a Plan Z for that matter.

Renting a flat – arguments for and against – is it worth it? Buying a property, and especially buying on credit, is for many people one of the most critical decisions in life. When making this decision, you have to focus only on what will be best for you. Maybe our friends’ flats have been partly or entirely financed by their parents? Or perhaps they have become indebted, and it costs them a lot of sacrifices to pay off the loan? Or maybe they earn better or have managed to put off a more significant amount of money for the purchase? Here are some of the arguments why it is worth renting out: You can quickly solve problems related to the apartment. You can live in a slightly larger flat or in a better area You can “follow your work” and easily implement a new life plan. You can give up everything and go somewhere else. You do not have “housing worries” but savings instead, which you can spend on making your dreams come true.
You are not afraid of a possible change of job. You could also rent with a company such as and share with other people.

It is also worth considering which of these issues are financially more profitable? Of course, there are many other arguments for each of the discussed options for renting or buying a flat. However, the list presented above clearly shows that the rent and purchase of a flat on credit can be attributed to a very similar number of advantages and disadvantages. Another thing is that for each of us the value of these arguments may be different. Which of them will speak to you the most depends on the stage of your life, your beliefs, experiences, needs, plans for the future and many other issues. Regardless of all these arguments, there is also a financial side to the decision under consideration.

For whom to buy an apartment and for whom to rent? At the very end, let’s try to find out in which situations particular housing options will work better.

When is it better to rent? Don’t you know yet what you want to do in life, where and with whom to live, where to work? Have you just finished your studies and just got your first job? You’re doing pretty well financially, but you don’t have a stable source of income? Are your savings not enough to cover 20% of your own contribution? If you answer yes to any of these questions, a much safer and more reasonable option for the moment will be to rent a flat.

When is it better to buy? Do you have a safety sphere built up and have managed to collect savings, from which you will cover your own contribution of at least 20%? Are you able to take out a loan for a period not longer than 20-25 years? The loan installment will not exceed 30-40% of your monthly income? Do you have a flat that you really like? Are you planning to spend at least 10-15 years at one address? Are you going to spend at least 10-15 years in the apartment you are buying? If you meet the above conditions, you can afford to buy a flat financed with a loan, and it is justified in your case. Which of these criteria is not met? It will be wise to postpone the decision to buy an apartment or to re-examine all pros and cons. If you do not have adequate financial security, think carefully about the loan decision. Due to lack of money, the desired apartment can turn into a costly and burdensome problem.

You can always buy a used motorhome and live as a happy, independent camper, but when kids come into play, this cheap option of accommodation won’t really be an option. So we are right back in the start.

What then should I choose to buy or to rent a flat? In the case of such important life choices, it is difficult to be 100% sure. The final decision belongs to you – but I believe that with the advice I mentioned above it will be easier for you to make it. Good luck!

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