Renting vs. Buying: Why renting, not buying, could be better for you!

In Malta and Gozo one often hears people talk about wanting to stop ‘wasting’ money on rent or paying for someone else’s home loan.

But is owning a home, really the be-all-and-end-all? Is renting instead of buying really that bad?

We’ll explore why renting could actually be a viable alternative to buying and in some cases, even better than buying a property – depending on your situation!

Flexibility

Let’s start with the freedom that renting can buy you. You’ll be able to upsize, downsize or re-locate at a rate a homebuyer could never achieve. Mortgages can restrict homebuyers from moving regularly, unlike the flexibility renting allows, with some rentals being available on 6 month contracts.

Renting is also far simpler than the complex process of buying and selling a property. You can, if you want to, try out a number of different areas and move more often.

Cost savings

The cost saving associated with maintenance repairs can often be overlooked – but it shouldn’t be. Your washing machine has stopped working? Contact your landlord. The boiler broke down? Contact your landlord.

The kitchen ceiling fell through? Contact your landlord.

Even smaller maintenance jobs like leaks, repairs and general wear and tear all fall under a landlord’s responsibility and if you owned your own home, you’d have to foot the bill yourself.

Less commitment

When you buy a property, you’re taking on a huge long-term financial commitment – which isn’t for the faint hearted. It’s a huge amount of money to be tied to, and missed repayments could have serious consequences. With renting, you can sleep peacefully at night in the knowledge that you don’t have this financial burden.

When it comes to renting vs. buying, it all depends on your personal situation and what’s best for you may change over time, but it’s clear that renting does provide a plethora of benefits. Not only does it allow you flexibility to move around and no maintenance costs – it’s also a much simpler process than buying your own property.

How to decide between the two:

Do you have enough money to pay for a deposit and other upfront costs?

As we mentioned earlier, one of the downsides of buying a house is the higher upfront fees. Most of the time in Malta and Gozo you will need to pay at least 5% of the property’s value as a down payment, as well as any additional mortgage fees and stamp duty.

Therefore, it is worth asking yourself whether you can afford to pay these various costs before deciding to take out a mortgage. Generally speaking, the larger the deposit you pay, the lower your monthly payments.

Do you have the financial stability to pay your home loan and still live comfortably?

It is important to assess how much you are earning and work out whether you will have enough to be able to pay your monthly mortgage rate and still have money left over to fund your living expenses  such as bills, food and leisure activities. There is no point living in a house that is going to force you to make unreasonable cutbacks, so make sure to consider your long term financial situation.

How long do you plan on living in the house for?

Generally speaking, renting is better for more short term accommodation, while buying a house is a long term commitment. Therefore, if you only plan on staying in a certain area or property for a limited period of time, then it makes more sense to rent. By contrast, if you are looking to stay in your house for the foreseeable future, then buying a house is the more economical option.

As you can see, there are an array of factors to think about when making the choice between renting and buying. Gozo Prime’s friendly team of experts have helped thousands of people buy and rent homes in Gozo and Malta. If you are still unsure, visit our main branch in Victoria and speak to a specialist.

We have a wide selection of great properties to suit your requirements, as someone looking for the perfect rental property. Whether you’re looking for a one-bedroom seaside flat in Marsalforn or a large farmhouse with a pool in Xewkija, we can help you with your next move.