Is Buying Worth It, Or Is Renting the Better Deal Nowadays?
There are several factors that need to be considered when deciding whether to rent or buy one of the villas for sale in Phuket, for example. An important one is your finances. If you can afford a down payment and you plan to settle and establish roots, buying is better. Otherwise, rent. In some cases, buying is also suitable if you want a permanent base to call home, even when you travel a lot.
Quick Comparison
The first step to making a good decision is to compare both options based on a specific number of considerations. In real estate, you have to look beyond the pros and cons.
Monthly Payment
- Renting: Rent is paid to the landlord monthly. Before you can move in, you may also need to pay for a security deposit and a few months of advanced rent.
- Buying: the monthly payment you make goes towards your mortgage, which, when fully paid, guarantees full ownership of a property.
Ownership
- Renting: Unless the arrangement is rent-to-own, you own nothing, and your stay is temporary. There’s even a risk of eviction or non-renewal of the lease contract.
- Buying: You have a home to call your own as long as you don’t decide to sell, and earn a long-term asset and equity.
Flexibility
- Renting: You can move out and relocate anytime and anywhere.
- Buying: Relocating is a complex process if you own the property. You’re responsible for finding your next property, selling the old one and dealing with all the paperwork. You can rely on real estate professionals to help you out.
Upfront Costs
- Renting: Pay the deposit, advanced rent (if required), and agency fees, and you should be able to move in right away.
- Buying: You need to pay a down payment, which is usually 20% of the total property cost, as well as other associated fees. In Thailand, you’ll have to pay for the acquisition costs, transfer fees, stamp duty, closing fees, and transfer costs if a property is bought via international bank transfers. Closing costs vary by region, with Phuket as the most expensive at up to 7% of the property value, excluding taxes and transfer fees.
ROI Potential
- Renting: There’s no income from being a tenant, unless you’re allowed to sublet.
- Buying: You have plenty of opportunities to earn a profit from your investment, especially if you decide to sell your home in rising markets or renovate prior to selling.
Which option is right for you?
- Rent if you want to move in right away and skip the higher upfront cost.
- Rent if you don’t want to be tied down to one location and prefer to travel internationally with friends and book long-term stays.
- Buy if you want to invest in your future, build equity, and even withdraw funds from your home.
- Buy if you want to enjoy good ROI, government initiatives and incentives, and long-term security.
Deciding between buying and renting a property is never going to be easy. But if you look at it from a financial standpoint, buying a property has more potential to earn. It builds equity and can be your source of income should you decide to rent it out. Ready to become a homeowner? Check out listings on Sunway Estates, a trusted provider of luxury properties.
