To buy or not to buy? That is the question/ Or should it be can I buy? (Buying vs Renting)

Member Name: yackers1

Product:	Buying vs Renting
Date:	10/12/08 (159 review reads)
Rating:

Advantages: ---------

Disadvantages: ---------

****Renting****

During my four years living in rented accommodation I lived in a house that was managed by the landlord himself in order to reduce costs and not pay letting agents fees, and a flat that was managed by a firm of letting agents.

When renting both the tenant and the landlord have to sign a tenancy agreement. This is a legally binding contract that sets out the terms and conditions of tenancy. I found that this document is non negotiable and if you don't like a clause in it then there is nothing you can do about it. The tenant has no bargaining power where this document is concerned and the bottom line is if you don't agree to the terms and sign it then you don't move in. With the amount of people forced to rent it is a landlord's market and there are always other potential tenants who will sign it if you don't.

I would advise you read the clauses very carefully and ensure that you abide by them. Should you break any of them then you, as a tenant, are on the hook and liable to ensure that any issues are rectified.

The landlord will always demand a damage deposit, which usually equates to one to one and a half times the monthly rent, although I have seen it substantially more depending upon whether the property is furnished or not. This is meant to be returned to the tenant after vacating the property assuming there has been no damage. In my experience the landlords have always kept all or some of this stating that something needed to be done despite there being no actual damage. My deposits have been kept to pay to have the windows cleaned, the garden sorted out and to sort out wear and tear. The cleaning of the windows and sorting out the garden were actually included in the tenancy agreement (I failed to see these clauses at first) although the wear and tear issue is not an excuse to retain a deposit. If you want to challenge the landlord it is going to cost you more money and I was told not to bother since the landlord always wins and you then have to pay those costs as well.

Most landlords will be accommodating with pets, although some do not like cats and dogs, which is understandable. If you do have a pet then expect to pay more damage deposit (remember to factor in losing this when you move out as well). I have a parakeet and whilst it can be destructive out on its own I ensure that it stays in its cage, on its cage or on its perch (its wings have been clipped). My last landlord charged me an additional £100. My friend had an oscar fish, requiring a large tank, and his landlord charged him £150 (which was lost when he vacated the property). What damage can a fish do? Remember to get written permission as well.

All tenancy agreements will state that you can't do anything to the property without the landlord's permission. At my last property, which was fully furnished, I needed permission to move the furniture around and re-arrange the cupboards. I would recommend that you get written permission for every thing to avoid problems when you vacate the property.

If things go wrong then in my experience, don't ever fix them or try to fix them yourself. I did this and made the situation a little worse and then had to pay for the full repair. After that I called the landlord out. When the washing machine went wrong I didn't even clear up the water and left it to him and also claimed the cost of my clothes that were ruined during the fiasco. The landlord tried to dispute it but requesting a copy of his insurance policy and details he soon caved in. I will leave you to draw your own conclusions on that one! (sometimes it is the tenant that get what is due to them).

The tenancy agreement states what utility companies supply the property. You are not allowed to change this even if you can get the services cheaper from an alternative.

****Buying****

I bought my first property just over a year ago and whilst saddled with a ridiculous mortgage (despite owning a basic bungalow) and being stripped of all my cash, it is the best thing I have ever done.

It is hard work owning a property but there is motivation to keep it clean, sort out the garden, keep the windows clean, sort out all the niggles and take great pride in it since you actually own it. In addition, I do not have to get written permission to fart in my own home like I used to have to in rented accommodation. If I want to drill a hole to put a picture up I will. If I want to pull something of the wall because I don't like it I can. Obviously these two things require the agreement from the other half!

I can choose who supplies the electricity and gas and have the freedom to shop around for better deals and quotes.

There is the disadvantage in that if anything goes wrong then you are responsible to put it right regardless of the cost. Before it would be a case of calling the landlord to sort the out the problem. Now it is me. However, I now believe in prevention rather than cure and tend to maintain things better. When I was renting if things started making a funny noise or didn't run right then I would carry on using them until they did go kaput.

****Conclusion****

If you can afford to do it then I would recommend buying. Whilst it is hard work and very expensive to run and maintain a property there is a great sense of pride and achievement. As an owner you have the freedom and flexibility (subject to the other half and finances) to do what you want to the property and when you want to do it.

I have found that being a property owner has taught me how to manage my finances better and how to prioritise and deal with going without what I want (but don't really need). It has been an eye opener.

Whilst I would buy every time I appreciate that a lot of people are struggling and since some analysts are saying that the housing market is still in decline and that it has not bottomed out yet. The credit crunch has really hit the property market and as the banks tighten up the purse strings, increase value to loan ratios (getting rid of the 110% and even the 100% mortgages) resulting in new buyers having to find bigger deposits, decrease the financial products available and increase the charges on those that are still available, it appears that this situation will remain for a few more months.

During this time the housing market is forecast to remain stagnant which will lead to a reduction in house prices which will affect those borrowers whose fixed rate terms are coming to an end but to what extent is still uncertain.

It is a catch 22 situation for new buyers trying to get on the property ladder. Whilst house prices are reducing the banks are not lending the money, therefore new buyers are in no better position to take advantage of it and are forced to face the wrath of the landlords.

Summary: Buying is recommended but it is a big stretch in the current economic climate