Should I buy a home or keep paying rent?

[John Wick]

Dear,

I am 37 years old and since 27 I perceived real estate as a money-sucking liability. I live in a country that used to had very high interest rates, so any basic math would lead to put all inn investments and keeping paying rent rather than buying a home. However, in the last few years the interest rate was drastically reduced (and consequently my gains - right now I marginally can make 4% yearly over the inflation).

With this COVID crisis, an opportunity come up to buy a home for a value 35% below the market at the same community where I am currently renting (10 minutes biking to work). Buying this home would consume 70% of my savings. Below are some pros and cons that I am considering:

Pros:

- 35% discount;

- The returns of my investments are low;

- If I had to find another place to rent, it would be very difficult (basically no other houses available for rent at a biking distance to work);

- The current moment in the company where I work is good, I have just been promoted and my area is doing well;

Cons:

- My rent is very cheap (I pay 0,3%);

- My European citizenship has been recognized and I do not rule out the possibility of living abroad, if I get a good opportunity;

- I would have a hard time to sell this property (there are several houses in this community listed for years);

What would you do?

[mozar]

I would keep renting.  Also consider putting "Europe " in your subject line to get more specific advice.

[blingwrx]

Keep renting. Something is off if the houses in the area you’re looking at dropped 35%. It must not be a desirable area and you may continue to see home prices suppressed for the long term. Even with the covid crisis in my area home prices have not dropped one bit, but I live in a VHCOL city where there is always huge demand. 

[adamR18]

This may be bad advice, but owning comes with knowing that YOU are in charge of YOUR OWN property.

I've had a plethora of issues with landlords- one was taking my rent money but not paying his mortgage, and another was a homophobe (I was just beginning to peek out of the closet at the time).

My last apartment had central heat that I could not control (it was a multi-unit building with one boiler), so the temperature inside my apartment would be 60 F one day and 81 F the next. In addition, they refused to fix or replace an ANCIENT oven that I could never get to work.

I bought (mortgaged) a property. Now, when my oven doesn't work, I'll get it fixed myself. I set my own thermostat to a temperature I want. I am not worried about a landlord getting foreclosed and absconding with my rent money.

Sometimes, it is worth spending a little money to actually have some control over your own life.

[mozar]

Right, just know that your primary home is a lifestyle choice, not an investment.