We know that some decisions we need to make require reflection and planning, even more so when they involve important choices in life and financial issues, such as buying a property.
When the goal of buying a home is defined, certain points must be taken into account so that the decision does not become a headache. Understanding the current moment – personal and global – is essential: will you have enough money to keep this property? Is real estate financing a good alternative?
All these questions make people wonder if it is better to rent or buy a property. It is important to keep in mind that, in addition to financial health, there are other factors that can influence the housing market and determine choice.
Check out the main points you should consider in this post before deciding between renting or buying a property.
When buying is not the best option?
There is no absolute truth to answer this question, because several factors can be determinant – socioeconomic, personal and family financial health, planning, among others.
Buying a property is not the same thing as buying a trip, for example. It is a decision that cannot be taken on impulse and then “canceled” without bearing the high costs that this type of transaction, with its due proportions, can entail.
Taking into account that most Brazilians do not have immediate cash for a cash purchase, it is important to reflect on the following issues:
– Would you be able to afford a mortgage loan?
– How long do you intend to stay in the property (perspective of moving to another city or country)?
– Do you want stability or flexibility to move around?
– What are your financial, professional and family goals?
• Common mistakes that keep you from getting out of rent
Rent or buy: how to assess profitability
For most people, having their own home is synonymous with stability, security and autonomy. It is not a choice from the point of view of profitability or investment. On the other hand, even out of curiosity, there is an interest in knowing how much that money used to purchase the property would yield if it were invested in some investment.
Whoever intends to make a cash purchase can calculate the property’s rate of return. This rate is how much the rent represents in relation to the total value of the property. To give you an idea, the value of rents is around 0.5% to 0.8% of the total value of the property. See how to make the account:
Rent value / property value x 100 = RETURN RATE
Let’s use as an example a property that costs R$500,000 and the rent amount is R$3,000.
The account is: 3,000 / 500,000 x 100 = 0.6.
This means that if the yield on an investment is greater than the 0.6% rate, the purchase may not pay off, at least financially. If the goal is not to have a home of your own, it is important to consider some disadvantages of renting:
– The owner can increase the rent or sell the property;
– Options may be limited depending on the type of property;
– You may have to move several times;
– Do not build your own assets.
The time to buy a property
Let’s assume that you are able to buy a property and personal goals are involved, but you are not yet convinced that it is time to make that decision. In this case, it is necessary to consider the factors that can influence the real estate market: economic growth, inflation, interest rates, regional development and real estate financing.
As we are experiencing a scenario of a drop in the Selic rate , real estate financing tends to become cheaper, which makes it the right time to acquire a property.
With cheaper credit, the power of choice also increases with a better payment condition. An apartment that wasn’t within budget before may now be.
Those interested in investing in the real estate sector to obtain a financial return can also benefit from the drop in the Selic rate. Real estate properties are unlikely to be devalued, and are sure-fire alternatives for those who want to use their money well.
Profits can be quite high if you bet on a neighborhood with growth potential, which is receiving improvements in infrastructure and transportation, such as subway stations, trains, bus stops, shopping malls and markets. All of this adds value to the property for a possible sale in the future or even to obtain extra income from rent.
What to put on the scale
Not everything in our lives should be decided only on the financial side, as is the case with the purchase of a property, whether a house or apartment. There are big dreams we want to achieve or even personal factors that cannot be calculated. Therefore, “buy or rent” is not an isolated decision. And dealing with this matter requires considerations about values, desires and aspirations.