Topic: Is renting an inevitable waste of money? - page 21. (Read 2609 times)

The minimum wage is at €620, with an average of €700–€800; thus, a rent of €400 is prohibitive if you're planning to live by yourself. Even a couple may struggle. With this upcoming loan program that I mentioned, the monthly payments are actually a little cheaper or approximately the same as renting.
Certainly, there's no direct answer to the question, but yes, the general rule is to avoid renting if possible. I'm generally quite handy when it comes to house repairs; I'd be able to repair a few things that may occur, but it doesn't apply to costly appliances such as a fridge or an oven.
Definitely, both options have their benefits and drawbacks, but some of those you mentioned apply to both renting and buying. For instance, at least in my case, finding a house near the center is a huge issue for two reasons: higher rent costs and a lack of parking spaces. However, the largest issue with a loan is commitment, whereas in renting, you can practically leave whenever you want.

Problems of the first world citizens. "I don't know if I should buy a house here because I'm not sure if I want to live here in 10 years" while in poor countries people save up to get central heating so they can stop with chopping wood once and for all.

I had 2 friends who rented out and they kept doing it until they got married. Once they did they took a loan and bought apartments because they both said that the installments were almost the same as the monthly rent but at least they live in their own place and will have something to leave their children when the time comes.

All the points or the limitations you raised are just fear of the unknown. Nobody knows the future that is why there are no perfect decisions. Life itself is a risk and it is riskier not to take risks. If you think house rent is eating your finance deeply and making you not have personal savings, it might be good to take the loan a get a house.

It might also be possible that you might remain with your girlfriend for life because she might end up exceeding your benchmarks or expectations as a husband. It can also be possible that the house location might become a megacity that would make the price of the house appreciate, that you might decide to sell it, get a new home and make a huge profit. There are also possibilities that you might get a better job that would give you the financial strength to repay the loan even earlier than the maturity date. The truth is that your concerns might not even happen in the future.

There are pluses and minuses in absolutely all cases.
If you want to buy a place:
* you will most probably buy it a bit farther from where you'd work (so you can afford to buy it), meaning you lose a lot of time in commute (no matter if it's car, bus, train or whatever)
* taking a loan is, as you said, something not too easy to take and may need certain advance planning
* even if you buy a place, it won't be like you have no other costs than just paying it back, maintenance and utilities are to be paid
* if you lose your job you may be forced to quick-sell your place, possibly even at a (great) loss
* you may end up - sooner or later - with neighbors you simply don't want to live near them (stinky, noisy, whatever)

On the other hand:
* even if the place is bought with a loan, you can still sell it if your relation doesn't work out or you want to go working in another city or country; though it may worth it selling only after at least 3 years
* the prices for houses/flats tends to go up - actually it's a sinusoidal with higher and higher ups - but it doesn't hurt watching the market and don't buy at top and sell at bottom; still it's usually a good long term investment.

Staying in rented place:
* no need for commitment
* it can be near (or at least not too far from) the work and the fun places
* you have the flexibility to easily go rent somewhere else if you change work or you don't like your neighbors


It's up to you to weight the pluses and the minuses; I' might have even missed some. In theory buying your own place is a great investment; in reality, not all cases/situations are that nice.
However, my analysis is valid for my country. Some points may differ in yours.

It's a big it depends. Are you handy enough to fix things at a place you own or is every little thing going to require you calling in a repair person?
How secure is the area in terms of home prices. In *general* home prices will keep going up. But you can ALWAYS point to areas some large some small that were hit hard for one reason or another in a real estate downturn that DECADES later are still below value.

What about selling it if you have to change jobs and so on.

The standard reaction is yes, get a house don't rent.
Then you see people who are just walking away form a home for various reasons destroying their credit and finances for years, when renting would have obviously been the better option from the beginning.

So as I stared with, it's a big it depends.

-Dave

You're clearly in a country with pretty low rent price. I don't know which country that is, but I'm also from a country like that, and I can say that I'll keep renting in the near future for several reasons, but a very big one being that we don't have a good well-developed mortgage system with adequate interest rates and long-term contracts (like you say, 15-20 years). My friends in Scotland opted for mortgage because to them, it was cheaper to pay the monthly mortgage than a monthly rent in the same district of the same city, so this way you both pay less and are living in basically your own flat. And the sum was very reasonable per month for that city, something a lot of people can afford, especially if it's a couple with both earning money. In my country, you'd need to pay around 3 times more for mortgage than the monthly rent, and you'd still find it very hard to find a mortgage deal. It's very unpopular, the interest rates are some of the worst I've seen looking at many countries, and it wouldn't be for 15 years because there's no trust in long-term economic stability (for good reasons) but instead, like, 5-8 years to pay for the whole flat.
So you need to investigate the country you're in, its situation and deals, the safety and reliability of mortgages there, and then make an informed decision.

If you're young and haven't inherited a property from your ancestors, chances are that you're forced to rent. Personally, I've been renting for over 6 years and have been living with my girlfriend for the last 4, sharing rent and utilities. Overall, we've both spent over €25,000 together, and after spending all this money, you're practically left with nothing and may be subject to looking for a new house at any moment.

The average rent for a one-bedroom apartment is between €300 and €400 at best; thus, I was thinking that taking a loan is as costly as paying rent per month, but after 15-20 years, you end up with a house. My main concerns are the following: First, if you're in a long-term relationship like myself, you can never be 100% sure that you'll be with that person in 20 or 30 years from now, which might prevent you from opting for a loan. Secondly, you need to be certain that the location or city of the property to be bought is convenient for future job offers and so on. Thirdly, because a loan is a many-year commitment, there's no guarantee that you'll be able to afford the monthly payment 15 years from now.

On top of that, finding the ideal house as a renter is almost impossible; there's a lack of housing, and rents are extremely expensive and unreasonable at the same time. We had a difficult time finding a house recently, and it's far from ideal. There is now a new government-funded loan program that is about to start, funding up to 75% of the loan interest-free while the rest is funded by private banks and is subject to a relatively low interest rate. This led me to think about taking a loan and purchasing an average two-bedroom apartment, but I have the concerns that I voiced earlier.