Is It Better to Stay a Tenant or Become an Owner in 2021 ?

Around 60% of French individuals own their homes; nevertheless, for those who are currently renting, the subject of purchasing real estate may arise. Market swings and erratic banking policies may, on the other hand, encourage individuals to stay tenants, if only for a short while. This unstable position has advantages that must be assessed on a case-by-case basis, and some people do not desire or have an interest in owning a property. Before we assess the real estate market in 2021, let’s examine the reasons behind the decision.

Why become an owner ?

Build up a heritage

This is, without a doubt, the primary motivation for the purchase. In theory, a rental is a payment made to a third party for the sole purpose of inhabiting a house. The property, including the repayment of a loan, is an investment that is discovered when the property is resold, excluding interest.

No more payments are necessary at the conclusion of the monthly installments: wealth is immobilized, and will continue to expand in value as the real estate market values rise. Real estate is one of the safest investments available to a saver among the numerous options.

Arrange to your liking

Second, owning the property gives us the freedom to change it as much as we want in order to suit our tastes. Works and upgrades can be carried out in peace – after getting the required permits from the appropriate authorities (for installations affecting the exterior in particular).

If the goal is to resell the home in the near future, be cautious not to over-personalize it: it may then have difficulties pleasing as many people as possible! If you want to rent it out, the same rules apply.

Safe accommodation

Last but not least, residents may be assured that they will always have a roof over their heads (or almost). The tenant, on the other hand, is subject to the owner’s goodwill, who, notwithstanding the lease’s protection, may order the renter to leave the premises under legal circumstances.

When we consider the long term, security is also a financial consideration: after the mortgage is paid off, the financial burden of owning a house diminishes dramatically. When income falls in retirement, this can be advantageous.

Why stay a tenant?

Adapt to your life context

When both choices are available, the decision to rent may be based on personal preference or apprehension about the future. A person who travels frequently and for extended periods of time, for example, will choose lodging that he can simply and swiftly abandon. When there are no finances available or the professional position is unknown, for example, life’s restrictions might make it difficult to get property.

Lower the costs

Another essential consideration is the property tax, which may be a significant financial burden for certain households and which, therefore, should not be borne by the tenant: the owner must, if required, include the charge in the agreed rent. In the case of the house tax, it has been abolished for a substantial portion of the population.

Furthermore, the cost of maintaining a home or apartment is not insignificant: from fixing the facade to replacing the roof, as well as updating equipment such as the boiler, costs may quickly mount. The well-informed renter will be able to preserve these funds and so build a financial legacy.

Exempt from credit

In most situations, purchasing a property necessitates obtaining a bank loan. This action entails a costly and long-term financial and binding weight, which is difficult to bear. A change in circumstances that makes it impossible to make monthly payments generates considerable financial and psychological problems, and the creditor will not hesitate to apply pressure.

Financial independence is still important as a renter. It will be simpler to leave the accommodation and locate one that is more suited to the current situation.

The real estate market in 2021

Determining the benefits of a property and calculating your budget are insufficient when deciding whether or not to purchase it. The economic situation might influence the choice by affecting the terms of loan approval.

The lights are green for the year 2021, and the indications are following the same pattern as prior years. As a result, home values continue to rise while borrowing rates stay at historically low levels.

If the health crisis and underlying economic issues induced a wait-and-see attitude among many participants, particularly banks that were hesitant to give new loans, we observe that the amount of transactions decreased by just 4% in 2020 when compared to 2019. In 2021, the situation is totally cleared, and the real estate market is performing better than it has ever been. Let us also mention that, as a result of consecutive restrictions and everyone’s prudence, household savings are hitting new highs, which might help with real estate acquisition initiatives.

While being a homeowner is often regarded as a life goal in and of itself, this status is not for everyone, and we encourage you to consider your long-term goals. If required, you can combine the two techniques by staying a tenant in your primary house while making a rental investment that permits you to purchase another property. Each person must come up with his or her own answer!