This is one of the most on-time questions of young Poles.
The answer to it is easy as both choices have their advantages and disadvantages which depending on the person and the stage of life they are in are more or less important.
Having worked in the real estate industry for years, we talk to many young people who are faced with this choice. We can see that the decision depends on the life situation and what is important for someone at this moment and the perspective of the coming years. Therefore, we will try to answer the question: in what situation is it worth buying and in what is it worth renting an apartment?
Purchase of an apartment and renting: credit rating, stability of employment.
The situation on the housing market in Poland allows the apartment to be repaid at the price of renting it. This is one of the more common reasons people choose to buy although it has financial implications.
The first and most important thing when buying an apartment is your financial ability. If you have savings that allow you to buy or finance a large part of the loan, the purchase decision will certainly be easier. Otherwise, you have to make a long-term financial commitment in the form of a mortgage. This is a great challenge for many young Poles; firstly to meet the appropriate requirements for receiving a loan. If you are employed on a high-paid contract, getting a loan will not be a problem. It’s worse if you have an other form of contract or even run your own business. Creditor look much less favorably at small and medium-sized enterprises than at employees on the employment contract, even if they earn twice their salaries.
Secondly, the loan must be repaid regularly. Besides the “here and now” financial state, you need to be sure that your income will not drop drastically. The situation on the labor market during the pandemic showed how quickly you can say goodbye to your position in company. Many people with loans lost their source of income and found themselves in a financial trap. On one hand, they had to pay off the loan. On the other; the situation on the labor market was difficult and it was not easy for them to find equally interesting and equally paid work. Often, in desperation, they accepted any work so that they could pay off the loan on time.
Similarly to the above argument, if you do not have credit rating, because you work as a freelancer, you frequently change jobs or run your own business, you may have problems taking out a mortgage. And when you prove to the bank that you can afford to repay the loan, you must ensure the continuity of income at a minimum level similar to the one at the time of the commitment. Ask yourself: Does my current employer give me this certainty? Will I easily find a job with a similar salary if I say goodbye to him?
Life situation. For whom to rent, for whom to buy an appartment?
The second point, no less important than the first, is the life situation and expectations for the foreseeable future.
Buying an apartment binds you to a given place for years, which is why this choice is most often made by people who know exactly the reason to where and why they want to live. City, district, street – when you buy an apartment, you stay with it for a long time, often for most of your life. Therefore before making a decision to buy, make sure that you know exactly whether a given location is “the one”.
This is a very important choice, because depending on the nature of your work, you will spend in your home from 1/3 to 2/3 of your day, month and year. Buying an apartment in a given location must be a conscious choice so be sure that you know exactly your expectations regarding the location in which you want to live.
On the other hand, renting an apartment gives you a much greater margin of error as to whether and where you want to live. It may turn out that the place that you consider the perfect location today will turn out to be inadequate after a year. Because traffic jams, troublesome neighbors or because it’s far from a new job …
Or maybe it will be great, but your life decision will force you to move? It is difficult to predict the future because of that renting an apartment is a better choice for anyone who wants to be able to make a change. Adapt to the life, housing and market situation.
Freedom versus stabilization. What will you choose?
The answer to the question whether it is better to rent or buy an apartment is the answer to the question: what do I value more in my life? Freedom or stabilization?
If it’s the former then renting an apartment is your choice. You will not invest “in someone else’s” instead you will travel more freely and change your place of residence. You will not be dependent on your employer or on work at all. Renting an apartment means greater independence and the ability to react freely to what is happening in your life.
On the other hand, buying an apartment is a long-term investment for people who know exactly what they want in life and have a guaranteed high and reliable income. If you meet these conditions and are looking for stability in your life, buying an apartment will definitely be a better choice than renting.
To sum up: whether you want to buy or rent an apartment depends on what you want to do in your life. And after that, as the classic used to say, start doing it.
And make your choice. :)