Rent or buy: how to make the right decision

The question of the right form of housing arises several times in the course of a lifetime. Especially when starting a family. However, both interest rates and purchase prices are currently at a high level. The market for properties for sale is still in a dynamic phase. As a result, there is a tendency for property seekers to turn to the rental market for the time being and even refrain from buying property altogether.

Whether it is worthwhile for you to rent or buy a property depends on a variety of factors. However, there was a slight easing on the real estate market in the third quarter of 2023. Rental prices and purchase prices are converging again, which can make buying a property quite profitable.

Advantages and disadvantages of renting

Renting an apartment has various advantages. As a tenant, you remain flexible. You are freer and more independent, especially when it comes to spontaneously moving to another location. In addition, the ancillary costs are lower and you don't have to worry about the upkeep or maintenance of your property. The disadvantage, however, is that there is a tendency for rents to continue to rise on the rental market. In addition, tenants are subject to the landlord in many matters, who has the final say on crucial issues. For example, tenants only have a limited say in conversions and renovations.

Advantages and disadvantages of buying

As a homeowner, on the other hand, you have complete freedom. You can do whatever you want with your home. You can design your property entirely according to your wishes and also carry out conversions and modernizations as you please. If you live rent-free after paying off a real estate loan, you save money every month and can also live rent-free in old age. A home of your own is still considered a stable investment and serves to build up wealth. In addition, an increase in the value of the property can be expected, especially in good locations.

Rent or buy: Which is cheaper?

Tenants pay a flat monthly rent, but do not acquire ownership over the years. When buying a property, most people do have to pay off a property loan, but they pay it off with their monthly installments and gradually build up assets. As rents are set to rise further in the future, buying a property is always a good decision.

How to make the right decision

A blanket decision like this cannot be made for everyone. Whether buying or renting is the better option depends on many factors. Ask yourself the following questions: How well off are you financially? Would you prefer to live in an expensive location, for example in a large city? Or would you prefer to live in a rural area where prices are more moderate?

Decisions often have to be balanced with work commitments. Those who need independence are better off with a rental property. But for families and anyone who feels they have settled in their new home, buying can be just the right thing. In any case, ownership offers freedom, space and plenty of design freedom.

Are you looking for an affordable property and would like support with your search and suitable financing? Please contact us. We will be happy to advise you and put you in touch with a neutral financial advisor.

Note

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

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