Suppose you are looking for a new property, a new place to live in. Usually, there are two choices – Rent or Buy. Which one is the right choice for you?
The simple equation is as follows – if you buy a house, all you need to pay is a single payment of X dollars (although you may pay this off in loans). If you rent instead, then you have to continuously pay a sum of Y dollars every month for as long as you live in it.
So in mathematics
If X < Y * Months, then buy house.
When both side of the equations are equal, then the tie is broken when you live for more months on the right side. For example, if buying a house costs as much as renting it for 20 years, then once you lived in the house for 21 years, you should have bought it instead and are just paying money pointlessly!
Outside of financial status however, there are other things to consider when thinking about these two choices. Buying gives you more stability and freedom, as you are not under the control of a landlord who has the final say in how he manages his property. In fact, some people consider these a much bigger factor in their decision to buy over sheer monetary calculations.
To sum it up, the longer you plan to live in a property, the greater the appeal of buying is. However, do not take this as a 100% unchangeable rule! To be more safe and secure, do an analysis on your own finances. There may be more to your personal financial situation that you don’t know might change the equation entirely. However, we do believe that it is a good rule of thumb that you can use!
We hope this has been helpful insight into your future plans of property investment. If you’re looking to take advantage of this opportunity, at Condo New Launches we have a wide variety of information on new properties for you to pursue.
