You are finally getting ready to move into your own place, but you are not sure whether you should rent a flat or purchase it. With interest rates climbing every second month, you may be concerned about whether you want to commit to a fixed asset.
Affordability and financial security is the biggest consideration. If you are financially secure and can sustain the mortgage loan repayments, then it is probably wise to invest in your own flat.
The benefits of owning your own flat or house usually trumps that of renting. Rather than merely paying a rental expense, you are investing in a fixed asset which will continue to grow in value as time passes.
Mortgage repayments are only subject to interest rate fluctuations, but will otherwise remain static, while rental rates tend to rise annually. At a future point, you could potentially also sell the property and make a handsome profit.
Owning your own home provides security and you will not need to move. It also offers the flexibility to renovate and customise it to your own taste and needs.
Owning your own property though does come with extra expenses such as property taxes and maintenance costs. You will also need upfront transaction costs and may need a cash deposit as well.
A drawback is that property as an asset is not particularly liquid which means it usually takes time to sell. The profit that you could potentially make will also depend on the market cycle, and whether you held onto it for long enough to accumulate some capital growth.
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