Buying vs Renting - your opinions?

[Michael569]

Hey guys, 

I'm curious to hear your opinions whether you have bought or haven't or have been thinking or have a position on why yes or why not

My partner and I are getting married this year, want to start trying for a kid and the thing that naturally comes along with that (in Eastern Europe where i was born) is owning your own property. 

I am aware of the trap of materialistic ownership. I am at a stage where I can't afford to buy but I can get a mortgage with the current income would be able to afford it. 

So my question is. Do you think it is important for a family to own? I think a flat rather than a house for a starter would be good. 

Is it important for a child to be growing up in an owned house? Like, is there something there, some form of inner security, feeling of comfort or something along those lines that is never quite fulfilled when renting? Could you traumatise a child in some way but, say renting vs owning? 

Technically when you have a mortgage you still rent but your landlord is now a bank which may or may not be better. 

I'd love to be in a position to spot buy but I can't muster 350K at the moment at will

@aurum @Emerald @Leo Gura  @Carl-Richard - tagging you guys because I know you're roughly my age and above so might have gone through something like this already but would very much love opinion of anyone else who has or hasn't. 

 

Edited May 1, 2024 by Michael569

[NoSelfSelf]

Renting is only good if you have a bussiness to invest  so you use that money to invest so, since when you buy you at zero lets say.

When you think about it its better to get credit from the bank and use it for a house rather than paying same amount on the rent and in the end you have a house...

At some point you need to own something renting at older age is no good if you not secured.

Edited May 1, 2024 by NoSelfSelf

[universe]

4 hours ago, Michael569 said:

Is it important for a child to be growing up in an owned house? Like, is there something there, some form of inner security, feeling of comfort or something along those lines that is never quite fulfilled when renting? Could you traumatise a child in some way but, say renting vs owning? 

What? 

I'd say that if you plan on staying in the area it's good to buy. If you think you won't then rent.

[Davino]

7 hours ago, Michael569 said:

My partner and I are getting married this year

Congratulations!

7 hours ago, Michael569 said:

Do you think it is important for a family to own? I think a flat rather than a house for a starter would be good.

It depends. I'll give you general advice but it depends a lot on yor partner and you.

Renting gives more freedom, example: you wanna go live in another city or country, you can leave whenever you want given for example that some new unbearable neighboors come to live upstairs... It's a great option but you never have something which you can call your own, for the good and for the bad.

Buying should be thought as an investing for your family, it's one of the most important life decisions to take. Things that my parents always told me, don't buy anything near rivers, volcanos, too close to the sea or any potential dangereous areas. Remember that there are no insurances for natural disasters and you will need a new place to live while paying the old one. This is something serious to consider. To buy you also need to understand the flow of the real-estate market, it changes and a lot. You should consider when to buy and also that you can make offers for less the price than what the house is being sold. You offer money and after one year a bit more and if the owner needs the money it will pressure him, this technique works better than just paying what it's asked for. In this line of reason, you have to envison whether the place you are buying in a few decades it will cost more or less money. Some areas will grow in richness while others probably will decay, so buying a house that after finishing paying the mortage will bring you benefits is a nice investment. With time your home can become revalued so that you can sell and buy a better home for your retirement. Even if you want, you can rent your past home for passive income and then buy a new place and pay the mortgage with that, although be careful with squatters. It's hands down the best methodology for passive income in your future. Also consider that there are places that offer renting first and then option to buy, this is worth exploring, there are actually tones of different contracts that people are unaware of. There are also flats for young people offered by the government for emancipation and familify life at least for some years and many many other things worth checking. Regarding mortgage you need to pay extra extra care of how it's done, don't hesitate to change bank if you need to. This is a life decision and how the conditions of these agreement are, is of utmost importance. It's also good if the mortgage allows for extra payment if you have extra money that month, there are times where speeding up mortgage will become handy. Don't be in a rush to do any of these, probably number 1 mistake people make is rushing, never ever make a decision while being in a rush regarding any of these, no matter if you lose "a great opportunity" really take your time, you will thank yourself in the future. Regarding constructions works, avoid them at any cost, even if they seem a bargain of apartment with just a little bit of constructions; 90% chances it will bring you a lot of problems and stress, so much you can't imagine. If you decide to do them anyway, consider that construction works from 0 are ALWAYS better than changing the pre-existing architecture of the flat/house. 

There are a million other things I could have said, I do have quite an experience on this sector so excuse me if this was all over the place just wanted to give as much value as possible. Wish you the best in this new life chapter! Take your time with your partner to have clarity on all of these. Feel free to ask more questions if you need to.

[Applegarden8]

tough topic. I am definitely buying an apt on loan, even if I am alone for the rest of my life. In northern Europe people tend to buy instead of renting. But I would buy only after the Ukraine war goes into remission and Russian war machine gets exhausted or the Kremlin regime collapses internally.

[Michael569]

11 hours ago, NoSelfSelf said:

Renting is only good if you have a bussiness to invest  so you use that money to invest so, since when you buy you at zero lets say.

When you think about it its better to get credit from the bank and use it for a house rather than paying same amount on the rent and in the end you have a house...

At some point you need to own something renting at older age is no good if you not secured.

Thank you for your perspective. I think the argument that you pay but eventually you'll own is one of those I try to use myself to justify the purchase. In UK, where I live plenty people rent till older age and many are doing fine but it does introduce some element of uncertainty 

7 hours ago, universe said:

'd say that if you plan on staying in the area it's good to buy. If you think you won't then rent.

Yeah , that's a good way to look at it. I'd say I'm pretty good with the current area so that goes in favour of that argument. Thank you! 

4 hours ago, Davino said:

Buying should be thought as an investing for your family, it's one of the most important life decisions to take

Indeed. I feel like you're never quite be ready to start because most people will never have to money to spot buy and eventually most will end up with a mortgage but I've got pretty used to paying rent and paying "rent" to a bank is kinda similar isnt it? You're just left on your own if things go south 

4 hours ago, Davino said:

hings that my parents always told me, don't buy anything near rivers, volcanos, too close to the sea or any potential dangereous areas.

Yeah, good call. I've seen house floodings when we lived in Wales a lot and that kinda of stuff terrifies the shit out of me, there go your life's worth of savings. 

4 hours ago, Davino said:

To buy you also need to understand the flow of the real-estate market, it changes and a lot. You should consider when to buy and also that you can make offers for less the price than what the house is being sold. You offer money and after one year a bit more and if the owner needs the money it will pressure him, this technique works better than just paying what it's asked for

Do you have any tips how can I educate myself more on the dynamics of the real estate market without googling directly? Happy to be referred to a book, Youtube channel or a good blog website. 

4 hours ago, Davino said:

lthough be careful with squatters.

say more

4 hours ago, Davino said:

lso consider that there are places that offer renting first and then option to buy,

Interesting! Never heard of this hybrid model, I don't even know if this exists in UK. Kinda like a trial run, right? 

4 hours ago, Davino said:

There are also flats for young people offered by the government for emancipation and familify life at least for some years and many many other things worth checking.

Yes, I'm pretty sure the UK government has some form of support for young families. There is also the ISA scheme in which where you start investing in an annual scheme, you get tax deductible benefit each year towards house purchaseI will look more into that as well, good call. 

4 hours ago, Davino said:

Regarding mortgage you need to pay extra extra care of how it's done, don't hesitate to change bank if you need to. This is a life decision and how the conditions of these agreement are, is of utmost importance. It's also good if the mortgage allows for extra payment if you have extra money that month, there are times where speeding up mortgage will become handy. Don't be in a rush to do any of these, probably number 1 mistake people make is rushing, never ever make a decision while being in a rush regarding any of these, no matter if you lose "a great opportunity" really take your time, you will thank yourself in the futur

This is honestly my greatest fear. I don't understand the mortgage system very well and I know you mortgage and then remoprtgage and the APR might change from year to year so you're kinda always on the edge hoping you're not going to be overpaying your house by 10-15% in the end with regards to inflation and interest increase. Any tips on how could I educate myself more on this? Besides the obvious like asking Chat GPT, I prefer something consistent and structured that goes step by step. 

4 hours ago, Davino said:

There are a million other things I could have said, I do have quite an experience on this sector so excuse me if this was all over the place just wanted to give as much value as possible. Wish you the best in this new life chapter! Take your time with your partner to have clarity on all of these. Feel free to ask more questions if you need to.

Thank you, this is brilliant. You've given me loads to think about. I've made notes in my Notion journal to educate myself more on these things. 

Anything else that comes to mind that would be worth knowing about, please feel free to share anytime

@Applegarden8 thank you! Who knows when that will be, from the look of it, we might be 50 by the time ceasefire is officially signed. 

 

 

Edited May 1, 2024 by Michael569

[aurum]

10 hours ago, Michael569 said:

My partner and I are getting married this year, want to start trying for a kid and the thing that naturally comes along with that (in Eastern Europe where i was born) is owning your own property. 

Awesome, congrats.

10 hours ago, Michael569 said:

So my question is. Do you think it is important for a family to own? I think a flat rather than a house for a starter would be good. 

Is it important for a child to be growing up in an owned house? Like, is there something there, some form of inner security, feeling of comfort or something along those lines that is never quite fulfilled when renting? Could you traumatise a child in some way but, say renting vs owning? 

I'm not going to be a great source for wisdom on this as I've never owned a home, aren't married and don't have kids. Take my perspective with a definite grain of salt.

There is definitely something comforting about a childhood home. My parents still have ours, and there is something nice about being able to visit as an adult. Everything feels very familiar, stable and safe. It's kind of like a rock in a world that sometimes can feel crazy, confusing, scary and tumultuous.  

I also feel like a home gives you more autonomy over your living environment. You can really set it up almost exactly how you want. With renting you tend to be more limited.

Other factors I would consider:

1) How much flexibility vs mobility do you want in your lifestyle?

2) Do you want to live in the city or suburbs / rural area?

3) What kind of school do you want to send your kids to?

4) Do you like taking care of your own maintenance?

 

Ultimately I think either could be a good choice. It's mostly a function of what kind of lifestyle you want.

[Snader]

12 hours ago, Michael569 said:

My partner and I are getting married this year

Congrats man!

I don't know which reference rates your banks are basing their interests on, but for example in Finland you pay so much interest at the moment that many of my friends have decided to rent instead of buying. It doesn't seem to be a good investment at the moment and people tend to prefer putting money monthly into stocks and other investments instead, to be able to invest into housing later, when economy is more stable. Of course there are stuff like interest rate cap you could be able to negotiate to your loan, but I wouldn't count on that.

In terms of investment you could also think about the area/(s) in which you are planning to buy. If the area has potential to grow in the future, then it might tip the scale towards buying, as the house will rise in value. Also if you are handy or you have friends or relatives that are, you might consider buying a house in a bit worse condition, so you could slowly renovate it and increase the value in a long run.

12 hours ago, Michael569 said:

Is it important for a child to be growing up in an owned house? Like, is there something there, some form of inner security, feeling of comfort or something along those lines that is never quite fulfilled when renting? Could you traumatise a child in some way but, say renting vs owning?

I would be more concerned about the area; Is it safe, is there possibilities for hobbies, good schools and other important services? The form of living doesn't affect a child per se, unless there are some status indicators at play. For example if there is an area that only has rental houses, then it might be labeled as something like ''the place where the poor people live'', as an exaggerated example. At least in Scandinavia there is this mixing housing policy used where urban areas and housing is being planned in a way to mix people from different social classes and different living forms into same buildings and areas to decrease segregation, so there is very little status difference between owning and renting.

In Finland at least, many rich people are starting to rent more, instead of owning, which seems to be losing its place as a status symbol. It's also really handy to be able to move without too much of a hassle, if you feel like it for one reason to another. 

It all depends on where you live, what values are shared in your living area and social circles, what do you value yourself, what's the housing policy and urban development in the area like, etc.? What are your thoughts on the matter, do you have some specific (for example personal) insecurities around the subject of renting vs owning?

Getting a child is huge, as well as buying your first own apartment. If there are no hard reasons, then maybe it wouldn't hurt to first go through the first phases of parenting to see how it feels in terms of housing, and after that make the next possible move to considering buying an own house.

[Snader]

24 minutes ago, aurum said:

There is definitely something comforting about a childhood home. My parents still have ours, and there is something nice about being able to visit as an adult. Everything feels very familiar, stable and safe. It's kind of like a rock in a world that sometimes can feel crazy, confusing, scary and tumultuous.  

That's a great point! For many people their childhood home has a very special place in their heart

Edited May 1, 2024 by Snader

[mmKay]

ADHD us perspective. Surprisingly good.
 

 

Edited May 1, 2024 by mmKay

[Emerald]

If you're in a position to buy a home, definitely buy one!

A monthly mortgage is usually cheaper than monthly rent.

And you're investing in something that could appreciate in value and that you could resell later on.

It's way better than throwing your money away on rent every month.

[Davino]

13 hours ago, Michael569 said:

Do you have any tips how can I educate myself more on the dynamics of the real estate market without googling directly? Happy to be referred to a book, Youtube channel or a good blog website. 

These comes from direct experience for diverse reasons, I really don't know any source just what I have lived at home. What I would recommend you is to start checking prices of different houses, different places, make a habit to stop and look where there is a real estate office and check how is the market, do you like the apartments shown, dowload apps to have a bigger perspective, talk with your wife what do you like and what you don't, visit apartments just for the sake of it and with different real estate companies, go to an Ikea and look for furniture how would you like your home to be, to feel, buy magazines on home decoration and so on.

13 hours ago, Michael569 said:

say more about squatters

In the future if you want to rent your actual home to buy a new one and have passive income, be careful who you rent it to. It's better renting your house to people that will be only for a limited ammount of time, for example like a family man that stays 5 years for a mine construction in your country, a diplomat that travells arround the world or a student travelling abroad for a phd or things of this style.

Besides that, it's rare to have squatters in your actual everyday home, very rare. Although put an alarm obviously as they can still break into your home and steal, if such a thing happens it will be very hard to feel comfortable again in your place. If one day you find squatters in your home, like they are there for living and not for stealing, when you call the police you must say that you have heard weird noises at your home and that you are sure they are stealing. If you admit they are squatters you will have a lot of problems as they also have rights, if you call the police on the basis of burglary, they will kick them out and then they'll have to prove they are squatters. So this little trick can save your ass. This is survival not ethics and law is very tricky in this sense, if you don't understand the system it will come back to bite you in the ass.

13 hours ago, Michael569 said:

Interesting! Never heard of this hybrid model, I don't even know if this exists in UK. Kinda like a trial run, right? 

Yeah, the best contract model in this regard works like this: You are there for a given of years: 5, 7 or whatever, depending on the contract and after some time you have the right to buy the apartment. All that you have payed over the years, will be discounted (the percentage is written in the contract) from the final price of the apartment at that time. An external source will check the price of the apartment at the selling time and the discount will be applied depending on how many years you have been.

Other contract models allow you the right for buying after a certain years with no discount, others you can buy whenever you want, even before the renting time is over. Other models, give you priority for buying the apartment, that is to say, if someone makes an offer to buy the apartment, you will have the right to offer the same money and buy it yourself, or negotiate, the overall point is you do have a contract priority for buying that place over external people. Many other options are available, these are the most common. Don't hesitate to talk this over with lawyers and owners, you can make a contract exactly for your needs both for your family and the owner. Remember you can make offers for less the price, they are always free to decline, but they will know you are interested and are actually willing to pay that much.

Why this contract model matters? because you KNOW how it's like to LIVE there. Many problems you only discover after years living in a place, so in this way you make sure you really wanna live there.

13 hours ago, Michael569 said:

Yes, I'm pretty sure the UK government has some form of support for young families. There is also the ISA scheme in which where you start investing in an annual scheme, you get tax deductible benefit each year towards house purchaseI will look more into that as well, good call. 

There are huge government helps in this regard, check them out. You could save a lot of money, contact a lawyer or an expert on the matter for advice to see if any option suits your family needs.

13 hours ago, Michael569 said:

This is honestly my greatest fear. I don't understand the mortgage system very well and I know you mortgage and then remoprtgage and the APR might change from year to year so you're kinda always on the edge hoping you're not going to be overpaying your house by 10-15% in the end with regards to inflation and interest increase. Any tips on how could I educate myself more on this? Besides the obvious like asking Chat GPT, I prefer something consistent and structured that goes step by step. 

It's a fear based on real facts, it's actually pointing towards something that needs to be taken into account.

The principle problem with mortgage is that it's SPECIFICALLY designed be hard to understand and messy, to the best interest of banks. On top of this, laws change continuously and jurisprudency is a pain in the ass. So don't feel stupid or ignorant, the whole system is designed for this.

What you need to understand is that real state is very dependend on geography, market and laws. So there is no general good advice, for general advice look Leo's video on how not to get scammed and maybe search fo some good books on the topic, but know that this is just broad and general. To understand real estate you need to expose yourself to massive experience, so in the same line as the advice given before, talk with different banks, tell them to explain what options they offer, talk with people who had that mortgage, how is it like and so on. There's no way out of this process but in, this is how you will make sense of it all. There are millions of different types of mortgage, for as little as I know, as a rule of thumb, static payments over time are usually better than those that change, although they will tell you: You will pay more Sir. Which can be true, but you know how much you pay each month, no surprises, and that gives peace and power of planification.

[bebotalk]

Neither is better than the other. it entirely depends on one's own needs and requirements.

[sholomar]

Depends on the total out of pocket costs in your market. From 1950 to 2005 and again from 2010-2020 houses were reasonably affordable and in decent supply where the market between buyers and sellers was balanced. Now houses are what I would call "overpriced" where it's a seller's market and are not even worth buying unless you have significant cash saved up for the down payment, say from your parent's net worth.  I've never been one to enjoy chasing scarcity or getting in bidding wars with individuals who are so desperate to own something.

People think it's bad in the US when it's worse in many other nations. It's to the point where homes may never be affordable again in some countries.  Where I live the cost to rent is less than half compared to buying at the moment. I was looking to buy but at current pricing I've basically decided not to participate in the system.

I still have a bit of emotional charge (negative feelings) on government overspending, modern monetary theorists, quantitative easing, and the whole bailout mentality. I believe they should allow deflation and liquidation events. This monetary policy the west has adopted since 2008 concentrates wealth up to the top 10% and inflates asset bubbles that don't really help the lower and middle classes.

Edited May 12, 2024 by sholomar

[Rishabh R]

@Michael569 congratulations. Even tough I have no experience with this but when I was a child I lived in a rented house in a colony then my parents bought an apartment. Even tough it was painful for me to leave my old house back, I think that buying is better option so that you are independent in regard to your house 

Edited May 12, 2024 by Rishabh R

[bebotalk]

On 01/05/2024 at 8:30 AM, Michael569 said:

Hey guys, 

I'm curious to hear your opinions whether you have bought or haven't or have been thinking or have a position on why yes or why not

My partner and I are getting married this year, want to start trying for a kid and the thing that naturally comes along with that (in Eastern Europe where i was born) is owning your own property. 

I am aware of the trap of materialistic ownership. I am at a stage where I can't afford to buy but I can get a mortgage with the current income would be able to afford it. 

So my question is. Do you think it is important for a family to own? I think a flat rather than a house for a starter would be good. 

Is it important for a child to be growing up in an owned house? Like, is there something there, some form of inner security, feeling of comfort or something along those lines that is never quite fulfilled when renting? Could you traumatise a child in some way but, say renting vs owning? 

Technically when you have a mortgage you still rent but your landlord is now a bank which may or may not be better. 

I'd love to be in a position to spot buy but I can't muster 350K at the moment at will

@aurum @Emerald @Leo Gura  @Carl-Richard - tagging you guys because I know you're roughly my age and above so might have gone through something like this already but would very much love opinion of anyone else who has or hasn't. 

 

Provided a person can afford the rent, i don't see why it shouldn't provide the same stability to a child..

On 01/05/2024 at 8:30 AM, Michael569 said:

 

 

[Leo Gura]

It highly depends on your local real estate market, part of the world, and cycle in the market.

Speaking from personal experience, buying my home was the single best investment I made besides creating Actualized.org. I mean both financially but also emotionally. Financially, I earned 80% on my investment within 4 years. Emotionally, it gives me great peace of mind and it also enhances my life every day to live in a nice, spacious house that I can customize and decorate to my tastes.

But I wouldn't do it if it meant going into lots of debt and tying yourself up with 30 years of work to pay it off.

Edited May 19, 2024 by Leo Gura

[Greatnestwithin]

1 hour ago, Leo Gura said:

It highly depends on your local real estate market, part of the world, and cycle in the market.

Speaking from personal experience, buying my home was the single best investment I made besides creating Actualized.org. I mean both financially but also emotionally. Financially, I earned 80% on my investment within 4 years. Emotionally, it gives me great peace of mind and it also enhances my life every day to live in a nice, spacious house that I can customize and decorate to my tastes.

But I wouldn't do it if it meant going into lots of debt and tying yourself up with 30 years of work to pay it off.

Love this and how you explain it@Leo Gura these days, sincerely, I don't know how you earn your money. It doesnt seem you do from actualized, that's the sense I get. Doesnt mean I'm right. 

[Leo Gura]

I earn all my money from Actualized.

[RawJudah]

In the UK, the housing market is insane! In a nice area a 2 bedroom house is like £200,000. 
Renting in the UK is also ridiculous. A lot of people have to move back in with their parents because they thought they could pay the rent, but in fact they can’t. 
Houses are for families. Absolutely. Renting a flat is not for families. Buying is very permanent, and renting is very casual.