Buying or renting a house is one of the questions young people most often ask.
The answer is not easy because it depends on each situation.
Nevertheless my answer is usually based on common sense. And common sense says that for a young person who has recently entered the working world, the ideal is to start your life by minimizing the risk of being in bank debt and “stuck” with a property.
In the beginning of life, several situations may arise that can increase the risk of buying: involuntary unemployment or, on the contrary, a new job opportunity far away from the place where you have your house, an increase in the family, or even a hasty house purchase that turns out to be a bad choice due to inexperience in negotiating or choosing the most adequate product.
If the decision was to buy, this young person is “attached” to a product. He usually has a bank debt, may be paying IMI, has to pay condominium fees.
Imagine a young man who bought a house in Lisbon but, due to a professional change, has to move to Setúbal to work: he will still have all these costs, will have much more expenses in commuting, when, if he had rented, he could have chosen to move to a house closer to his workplace, saving a lot of money in transportation costs and commuting time, thus increasing his quality of life.
Therefore our advice is that between 4 to 5 years after you start working, the option is to rent.
After that period, it will be a personal choice.
The meaning of buying
One should not look at buying a house just as an expense, but as a long-term investment. Real estate is a safe investment. Make sure you have thought through the purchase, both in terms of the property and the investment itself. Calculate how much equity you have invested, how much debt you have to the bank, what the market value of the property is, what the condition and location of the property is. Because, only if the combination of all these variables has been correctly done can we speak of a “safe investment”. Otherwise, we will be talking about a bad investment.
We hope that these tips have been helpful in making your decision whether to buy or rent.
If you are interested in buying a house, we recommend that you read the article Five things to watch out for when buying a house.