Buying vs renting a house: What's the Difference?

If you're thinking of buying a home in Spain, you've probably asked yourself, should I buy or rent first?

 

Here are the pros and cons for each situation.

Disadvantages of renting a house in Moraira, Spain:

Rental prices have skyrocketed and often the landlords, apart from asking for a high rental price, want the tenants to pay for water, electricity, gas, pool and garden cleaning.

But this is not the biggest problem when renting a property in Moraira. The vast majority of owners do not want long term rentals, as the summer months are very lucrative.

You have probably seen advertisements on real estate portals for long term rentals, only from October to May. 

And what happens in the summer, where am I going to live?

Many landlords want the best of both worlds, i.e. to be able to rent on a weekly basis from the beginning of June until the end of October and to find a part-time tenant from November until May.

The option of renting for several months, can be good when you are looking for a house to buy, because you have a place to live while you comb the real estate market in search of your new home, without any rush or stress.

Renting is a good option if you are not sure about the area, or want to get to know it better. If you definitely like the neighbourhood or the area, then you are ready to buy.

If you have the money, buying a house is actually better than renting, as it is a good investment that you can pay off, for example, by renting your spanish property in Moraira.

Another advantage of owning a home is that you can enjoy it whenever you see fit. However, if you rent, it is likely that the house you want to rent is already booked.

When you buy a house in Moraira, you always have the opportunity to make improvements and decorate it to your taste, adding extra value to the property.

Add your personal touch and make the property your home.

One of the advantages of owning a property in Moraira is to add your personal touch and feel at home, if you are the type of person who likes to decorate. 

Enjoy the experience of designing your property and going from shop to shop looking for furniture and decorative objects for your home!

However, if decorating and having to worry about the state and maintenance of the property is not necessarily your thing, renting would be the best option, as you don't have to worry about anything.

 

Is buying the right decision or would renting be better?

Buying a house in Spain is a fairly safe investment. If you buy to rent out your property, you will get an annual return on the property, enough to cover the annual expenses and make a profit. Moraira and the surrounding area is in high demand for year round rental, you only have to look at the property portals to see that there are very few houses available for rent.

If the property market goes down, you have the guarantee of renting, without having to take money out of your pocket every month to cover expenses.

Other advantages of buying rather than renting

Everyone knows the excitement of buying and knowing that you own a property abroad is a wonderful feeling. It gives you that extra motivation and peace of mind knowing that you can enjoy it at any time.

 

Disadvantages when buying instead of renting in Moraira.

One of the current cons when buying a property are the taxes related to the purchase of a property, which amount to +/- 12% of the value of the property. These are as follows: 10% transfer tax and +/- 2% for notary, registry and lawyer fees.

If you decide to buy rather than rent, ideally you should have all the money and not need to take out a mortgage, as the price of money has risen recently and looks set to continue to do so over the next few years.

The price of property in Moraira and the surrounding area is another fundamental point when thinking about buying. Prices are stable and there is a high demand from buyers, which is a guarantee.

In conclusion: buying requires a bigger upfront cost, but renting is more expensive in the long term. A good rule of thumb is that buying a property becomes better value after around 10 years, compared to renting an identical property.

 

NOTE: This blog post is simply a guide and my personal opinion. Everyone has different needs and situations.

 

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