Rent or buy: which is more cost-effective?

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Is it better for you to rent or to buy a property in Portugal?
10 November 2017, Redaction

Whether you’re looking at flats, villas or holiday homes, there’s always the decision of whether to buy or rent, but how do you know which is best? It’s worth taking the following into account...

Cost of a mortgage vs. cost of rent: You won’t often be able to buy a property outright without a mortgage, which comes with its own monthly payments. You’ll have to do the sums carefully to see if those payments are more or less than you’d pay in rent each month, but also know that owning a property comes with its own costs that you wouldn’t have as a tenant, such as maintenance.

Tax exemption: You may be required to pay certain taxes as property owner that don’t apply to renters. Consider all the options and research how the local laws will affect you.

Know the area: What do most people in the area do – rent or buy? Try to find out what the neighbours are up to, then crunch the numbers in your own case. The most cost-effective option can depend on where you’re living.

It depends on your lifestyle...

Are you moving or staying in one place? For those who need to move around for work or family obligations, renting is normally seen as the most sensible option because it provides flexibility. However, if stability and security are what you need, it may be best to buy.

Long- or short-term? In general, if you’re planning to live in the property for over 5 years, it is advisable to buy rather than rent. This holds especially true if you’re looking to rent out to tourists while you’re not there but not necessarily if the property will be your main residence.

The decision whether to rent or buy is yours, so think carefully and don’t take it lightly.

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Ready to find the house of your dreams?

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