To buy, or to rent: that is the question

If you have happened to choose an apartment for yourself or a shop or office for your work, you certainly know that the first question to ask is: should I buy or should I rent? Both renting and buying have advantages and disadvantages, and depending on the use you want to make of the building and of many other variants, a choice might be better than the other one.

First of all, we must say that in many cases renting is a forced choice for those who cannot take out a loan, but this does not mean that a loan, when it is possible to choose it, is always better than a house for rent. One of the cases when renting is better than buying, for example, is when you are looking for a short-term flat. If you are not going to stay in the same flat for more than 10 years, for example, renting can be more advantageous than buying a house that in few years you would have to refurbish – with an additional expense for you – perhaps before you have paid off your loan.

And this is the second advantage of leasing: unless the contract contains other conditions, when you rent an apartment or any other type of building you are not expected to take on renovations orextraordinary maintenance. This is something that should not be underestimated, especially if you think about the extent of interventions like these in terms of expenses.

These are the advantages of renting houses and apartments to live in, but the number of advantages increases in the sector of offices and shops to rent. Taken for granted that when you start an activity you must plan a big expense for specific tools, it is self-evident that when you open a shop it might be better for you to spare money and invest in your tools, and for this reason you might prefer to rent instead of buying. Moreover, the law “helps” a lot the tenant of a shop for rent: in Italy, for example, if the owner of the shop does not renew the lease after 12 years of contract, he has to pay the equivalent of 18 monthly payments of rent, and if he decide to sell it, the tenant has the right of pre-emption.

Loans are preferable in the case you are going to stay in the same house forever or for a long period. In this case, indeed, not having to pay a monthly rent, you would gain on long-term. Moreover, with the passing of time the building might gain value and would be a better investment than a house for rent. However, in the case of shops, you must keep in mind that if it is not in a strategic or prestigious position it will not be so easy to sell it again, and it will not gain much value with the passing of time. The situation of offices is different, as they might be easier to sell than shops also if they are not in a very favourable position.

To sum up, the choice between renting or buying a house, a shop or an office, depends on the span of time you are going to stay in it and on type of building, as well as on your budget and on the possibility you might or might not have to apply for a loan.