Renting Or Buying A Home? Get To Know The Differences In 4 Points

Amal Ali 07 Jul 2022

Owning the property that you live in is one of the most aspired goals for any individual. People spend a lot of time imagining the specifications of their dream home. But when the moment comes the choice becomes difficult. And the questions start to increase, should I own a home? Is renting the best option for me? Where and when should I start looking for a home to buy?

We must first assure you that you are not alone, as everyone needs a place to live, whether it is rent or buying. Many people go through this experience and many are confused. The pressure increases when you feel compelled to make a quick decision. This is what you should completely avoid. The process of owning or buying a property is not a short journey, but rather it is full of details that need thought and consultation to reach what suits you. The decision depends entirely on every person's circumstances and financial ability to purchase.

But there is no doubt that each individual must put a plan to secure his future and ensure stability in his living space. Planning begins with securing a stable source of income until you reach financial stability first, which helps you make the right investment steps. Whether you own or rent, both require a stable and periodically available source of income.

In this article, we will try to show you the benefits and drawbacks of both owning and renting.

In addition to this article, you can benefit from this guide with 5 tips to consider before buying your home.

Initial Thoughts

One of the most misconceptions among people is that renting is a way to waste your money, so you should own your property and stay away from renting. But it is not possible to be certain of the correctness or failure of any method. The choice of rent or ownership depends solely on you the decision-maker. If you are going to own your home through debt, in this case, buying a home puts you at risk if you cannot pay the debt later.

On the other hand, renting is the cheaper option in the short term. It is known that the value of rent increases with the years. If you choose to rent for a long time, you expose yourself to financial loss, as it would have been more beneficial to develop a plan to use the amount of rent paid monthly and put it as a down payment in your own home.

Take a look at this article 9 Frequently Asked Questions That People Ask About Real Estate

What are the advantages and disadvantages of renting?

The trend towards renting is one of the biggest ways that help people start and move on with their lives easily. Whether you are getting married, seeking independence, or even the nature of your work forces you to move a lot, you will therefore need to change your home whenever you have to move.

So let's start first with the advantages that rent provides you with:

Ease of movement: One of the biggest advantages offered by renting is your ability to decide to change your place of residence, whether for maintenance reasons or to change the location. All you do is pack your bags and move without thinking of any other burdens.
Fixed payment: according to the agreement concluded with the landlord, you will be able to develop a financial plan to pay the rent. This fixed amount helps you to organize your expenses and does not put you at financial risk because you know in advance the amount of money you will pay.
No bills or maintenance responsibility: the responsibility for maintaining the property lies with the owner of the building, who is also responsible for entering the basic facilities and paying the fees for them. This will remove additional burdens.
No down payment: One of the biggest obstacles people face when thinking about buying a home is the down payment. In the case of leasing, you will get rid of this point and you will not have to pay any down payment.
Benefit from recreational services without subscription: One of the biggest advantages that rent offers you is your ability to take advantage of recreational services, whether inside your property or the residential compound. You will not have to pay annual contributions for the property as it is the responsibility of the property owner. Of course, entertainment services will increase, and the rental price will increase.

Renting disadvantages can be listed as follows:

Rent prices are subject to increase: One of the biggest challenges of renting is that prices are always subject to increase and often with each renewal of the contract the landlord will ask you to increase the rent price due to the increase in real estate prices in the whole market. This point may cause some instability because an increased rate may not be suitable for the tenant, and he will have to search for a new property.
The owner can sell the property: the owner of the house still has the right to sell the property, which may lead to the cancellation or non-renewal of your lease. Which forces you to enter again into the circle of searching for a home.
You cannot do any fundamental alterations: While some owners allow renovation work in the house, you cannot do any major alterations, which forces you to accept the condition of the house as it is.
Not the best solutions in the long term: In the end, no matter how long the lease of your property remains outside of your ownership.

Browse this article 4 things will interest you about the Egyptian real estate market.

What are the advantages and disadvantages of buying a home?

There is no disagreement over the desire of everyone to own a property of their own or even to seek to own more than one property. The real estate market has proven so far that it is one of the sectors that provide a high level of stability for individuals and investors. Real estate prices are steadily increasing and always guaranteeing a profitable return for every person seeking to invest. In addition, everyone learned from the experience of previous generations that investing early and seeking to own your home quickly is always in your interest.

The main advantages of buying:

A sense of stability: The greatest need for a person remains a sense of stability and security. And owning your place of residence enhances this feeling.
Complete freedom for modifications: owning your home gives you the ability and complete freedom to renovate and make your designs, making them match your personal needs and in line with your taste.
It is an investment opportunity: owning any property, whether it is a residential property or a commercial property, allows you to think about investing. Whether by renting the property if you own another, or reselling it and taking advantage of the price difference.
Real estate prices increase over time: It is certainly the price of the property you are buying now will certainly increase within months without any intervention from you. And in this way, you will be the first beneficiary, as your profits will increase in the origin of the property if you think of reselling.

Disadvantages of buying real estate:

Inability to move easily: Although buying your home is full of advantages, you will find in return some points that may hinder you. One of these points is your inability to easily move any time you decide to. Where at least you have to make a plan to settle for at least 3 years in the same area that you have chosen to buy your home.
Long-term financial commitment: Buying a property is not a momentary decision, but rather a decision that puts on you a set of financial obligations that can last for years. Especially if you choose the installment, you will have to continue to secure the amount of the installment so that you do not have to enter into any legal disputes.
All responsibilities fall on your shoulders: When you are the first owner of the property, you will be the first responsible for everything related to the property, starting from the smallest maintenance work such as repairing a door to the essential transactions such as taking care of legal matters.
Change can be expensive: If you buy a house and then decide to change the place of residence and buy another home, you will find that such decisions cost you a lot of money.

Choose what type of unit suits you The most popular real estate types & units in the Egyptian market.

How can I make up my decision?

To feel that you are making the right decision, you need to think carefully and ask yourself some questions that will help you. Do not rush and always try to consult those around you and those who have experience. Here is a set of questions that will help you think and make the right decision for you.

Is now the right time to buy a house?

The answer to this question includes two aspects: the first is to determine the appropriate time for you to buy a property. You should not follow any advice that motivates you to buy your property when you do not have enough confidence or ability to buy.

The other side is the timing of the market you will be researching. Like any sector, the real estate market is subject to ups and downs, and here consulting a real estate agent will help you determine the appropriate time to submit a purchase offer for a home at the most suitable price for you.

Have a look at this topic What is real estate consultancy and how can you benefit from it.

Do I have the financial ability to cover the costs of owning my own home?

As we explained in the previous points, the importance of financial stability is the main factor that helps you to successfully own a property that suits you. You should take this point seriously and in a detailed way.

You should develop a financial plan that includes the amount of down payment that you can pay and the number of installments that you will be able to pay periodically. We also advise you to always specify your needs and wants for the house you intend to buy, which will avoid you entering into random searches.

Do I have the ability to settle in the same place for more than 3 years?

Answering this question will enable you to make the right decision about the area in which you wish to settle. One of the biggest factors affecting the value of the real estate is the location and surrounding area, the quality of services, and the neighbors. Determine what lifestyle you would like to adopt and before you buy a house try to take your time to get to know the area around the property. These answers will spare you sudden relocation decisions after buying a home.

What are my short and long-term plans?

You always have to look at things comprehensively. Determine what your goals are for the next three years and the next ten years. Do settling down and buying a home one of them, or do you prefer other options such as traveling or starting your own business? Always define your goal clearly so that you achieve what works for you and not those around you.

What are ways to finance owning my home?

If you decide to own property and buy your home, in this case, you can learn more about the different ways in which you can own your home and choose the most suitable for you. A range of methods is available, such as installments, seeking a loan, or opting for real estate financing.

In the end, always remember that the decision belongs to you, and then you will find everything that encourages you to implement your decisions.

Before signing your purchase contract read this 6 key points will help you avoid mistakes in real estate contracts.

At Inland, we aim to help everyone who dreams of owning their home, whether through real estate consultancy and services or by providing real estate information to facilitate your journey.

You can always contact us directly on this number 01003366453 and we recommend that you follow our website for the latest real estate news and weekly articles.