Is it better to buy or rent a house? We help you decide!
The truth is that both the housing market and the rental market are on the rise. The sales prices of real estate rose by 13% in comparison with the values of 2011, in the Algarve. Also, the national leasing market shows an increase of 26% in 2017 compared to the previous year. At the moment, the average monthly rent for a two-bedroom apartment in the Algarve is €427,37.
After this summary of the current market, the critical thing is to know the differences, advantages and disadvantages of choosing between buying a home or opting for a lease. Find below a table that will guide you in making this decision:
|
|
To buy |
To rent |
|
Initial investment |
Investment of about 20% of the value of the property valuation. |
Usually, an advance payment of rent is required as security, which will be much lower than the initial investment of a home purchase. |
|
Mobility |
Mobility is lower, especially if you have a bank loan. |
You can move out as soon as you finish your contract. |
|
Stability |
The permanence in the house depends solely on you. |
Your permanence in the property depends on the will of the landlord. |
|
Freedom to change space |
Total freedom. |
The property is not yours, so there is limited freedom to change what you do not like. |
|
Additional expenses |
Utilities, as well as all other costs of housing: condominium, IMI, insurance, maintenance, etc. |
Depending on what the contract includes you should not have additional expenses other than utilities: water, electricity, gas, internet. |
|
Equity value |
You will be paying for something that in the end will be your asset. |
You will be paying only for the use of the property and not the house purchase. |
|
Property Valuation |
When you buy a property, you can get back your investment depending on the market. |
Not applicable. |
If you intend to stay at least three years in an area and have liquidity for the initial investment Casas do Barlaventoadvises a property purchase. On one side, there is currently a shortage of houses for long-term lease; on the other hand, the interest rate on housing credit is at historically low levels, with banks facilitating the investment, thus being possible to get smaller payments.