Everyone has to live somewhere and your choice of home will be influenced by your upbringing, lifestyle and financial capabilities. Most people will be faced, at some point in their lives, with the need to decide between buying a home and renting one. With exceptionally low interest rates many people are being presented with an opportunity to buy sooner than they had originally planned for. There are positives and negatives to both options and it is important to be aware of them and make the right decision for you:
Advantages of Buying Property
- Equity: Purchasing a home allows you to build a nest egg for yourself. This is achieved by paying the mortgage and the general upward trend of house prices.
- There are several tax breaks available to home owners and these can be significant. The actual savings should be checked according to your circumstances and the state you live in.
- A fixed rate mortgage will ensure you know exactly how much you need to pay every month, this is important for stability.
- If for any reason you need or choose to leave your home it may be possible to rent it out and have an income.
- Generally homeowners become more active in their communities, building friendships as they expect to stay there for many years.This can make the community a happier and safer place to live.
- Decorating can be done according to your tastes and desires; you do not generally need to seek permission.
Disadvantages of Buying
- Maintenance can be one of the biggest expenses for any homeowner. Alongside general maintenance there will be repairs which need completing from time to time. Even if you are able to perform the repair yourself; there can be a considerable cost involved.
- It is not easy or quick to release the capital tied up in your home. Should you need the capital quickly you may not actually be able to release it.
- Finance is an essential part of life but before you can purchase a home you will need to locate a reasonable sum of cash to use as a deposit. Once this cash has gone you will not be easily able to use it for anything else.
- Insurance is mandatory for homeowners with a mortgage; this is an additional expense which anyone renting does not have.
Advantages of Renting instead of Buying
- There is no maintenance! Simply call the landlord or supervisor to have any problem resolved.
- It is very easy to move; you simply hand in your notice and remove your possessions.
- Houses can depreciate in value and leave you with negative equity; this means you are both trapped in your house and have lost money. This will never be an issue if you rent.
- You will probably have some disposal income available each month to utilise elsewhere.
Disadvantages of Renting
- Rent can go up and you have little control over this, particularly if your current home is perfect for your needs.
- There is no opportunity to build equity or a nest egg which can be released when the property is sold; the property is not yours.
- Remodelling will almost certainly not be allowed and in many cases you will need permission simply to redecorate. This can make it difficult for the house to feel like your home.
Before deciding on whether to invest in property in Turkey or in any other country, you should weigh the pros and cons above with the following questions in mind:
- How long do you see yourself staying, realistically at the property? Creating equity from property purchase is a long term game. If you are not intending to live there for more than five years it is unlikely that any rise in prices will cover the legal fees associated with buying and selling.
- What costs are involved? You must establish the fees and charges which are part of purchasing the property to ensure you have enough funds available. You should be particularly careful when calculating your budget and setting an affordable monthly payment.
- Is the home in the right area for your future plans? If you hope to have children in the near future are you buying a home near the schools and facilities you want them to use? If not, will you need to relocate again? This is an important consideration when purchasing.