There is a common expression that is often bound around, “renting is dead money” but is that really the case when you think about? Let’s consider some of the ‘ups’ of renting prior to purchasing.
I am not going to say that I completely disagree with the statement, to a certain extent elements of it certainly ring true. Of course you are lining the pockets of your landlord, which many will see as a ‘down’, rather than the alternative of possibly paying a mortgage on your own property. However is it wrong for someone to rent, whilst saving for a deposit, and pay that so called “dead money”?
The most important ‘up’ for someone renting is you have your own freedom, away from mum and dad for example, you are responsible for looking after yourself. An important step for any younger person, you develop the much needed skills to cater for your own needs, be that learning to cook or clean or learning how to appropriately manage your own finances. With renting, much like a mortgage, you have multiple commitments you have to pay, providing you with much needed experience for when you come to purchase your own property at a later date.
Another ‘up’ of renting is that you benefit from not having to fork out when things break, like your boiler for example, the onus is on the landlord to foot the bill.
An ‘up’ again, if you are planning on purchasing a property with your significant other, renting gives you the opportunity to find out if you can actually live together. Potentially ‘tied in’ to your mortgage for a number of years and you will likely have to pay early repayment charges amongst other large costs to sell your property and move on. With renting this it is far simpler if things sadly don’t work out.
Although I’ve said of several positives above and touched on the negative that you don’t own your own property, don’t be discouraged if you feel ready to take that life changing step. The above points aren’t appropriate for everyone and there’s no one size fits all approach when it comes to deciding what is best for you.
When you are ready to venture into purchasing your own property is it always worth seeking independent financial advice to ensure you are getting the best suited deal for you.
Daniel Brown BSc (Hons), Cert SMP
8th May 2017