As Shakespeare would put it: To buy or to rent, that is the question… And it is usually a big question for those who are going to live on their own for the first time or for those who need housing in Spain. Barcelona is an expensive city when it comes to renting or buying property, but the truth is also that both options have its advantages and disadvantages.
Today, this article by ShBarcelona will analyze renting and buying properties. So keep on reading if you still have doubts about what step to take on the real estate market.
Related article: Guidelines when Renting an Apartment in Barcelona
Advantages and disadvantages of renting and buying property in Barcelona
Barcelona is, as we have mentioned before, an expensive city to live in. Rental prices tend to be high in almost every district, and what is worse, is that there is so much demand at the moment that there are more requirements than before when you want to rent.
But on the other hand, prices are also high when you want to buy a property. In addition, mortgage conditions are more difficult to meet now, so it is not at all easy to apply for and be granted a mortgage.
But luckily it is not all problems and drama, and both situations – renting and buying – have their advantages. We will focus on some of the positives first:
Advantages of renting
- The initial investment can easily be done because the new law only allows a property owner to ask for no more than two months worth of deposit.
- Paperwork and other formalities are minimal, which results in not spending too much time in signing a rental contract and moving into your new home.
- If you have made a mistake, it is easier to fix when renting. If you have chosen the wrong neighborhood or found a better property, then ending your current contract and moving to a new apartment is easier.
- Renting sometimes allows you to live in an area you wouldn’t be able to buy a property.
- In general, renting means tax benefits for both the tenant and the property owner.
- Renting your home means you have fewer costs, as many of the taxes are being paid by the property owner. (unless specified differently in your rental contract!)
Disadvantages of renting
- Your rental contract will have a minimum duration, and leaving the property earlier will result in paying a penalty.
- You are not allowed to change anything in the apartment without the permission of the property owner. And this can be a real stumbling block if someone wants to make improvements to their home.
- The apartment will never become yours, no matter how many years of rent you have paid.
- The monthly rental fee will be more or less stable, and this means you will never be able to profit when apartment prices are decreasing.
Related article: Buying Housing In Barcelona
Advantages of buying
The property is available for any purpose you desire, as you are now the owner and you do not have to ask anyone for permission.
- You can make any changes to the property you like, and you can do some remodelling or make other improvements.
- Generally, if you invest in buying property, there is a certain return on investment, and the Spanish real estate market is in full motion.
- Investing in property means you are saving money for the future.
- Once the property has been fully paid back, you will no longer be responsible for monthly mortgage payments.
- With current low interest rates, it is cheaper to buy a property than to rent.
Disadvantages of buying
- You need a large amount of savings to buy a home.
- Formalities have become more complex, more expensive and more taxes must be paid.
- Banks are more rigorous in granting you a mortgage, and they only provide a maximum of 80% of the total value of the property.
- If you cannot pay your mortgage anymore, then you can lose the property and everything you have invested in it.
What do you prefer, renting or buying an apartment in Barcelona?