“Rent or own?” It’s a perennial question. Both make sense and have their appeal, especially with regard to a self-determined life. If you look a little more closely at their respective advantages and disadvantages, one of the two options offers some compelling pluses.
Top five advantages of renting
- Greater mobility: You can change locations quickly, since finding a new tenant is normally no problem. You are more able to seize an opportunity, such as a new job, or to simply escape irritating neighbours.
- Speedy adaptation to changed circumstances: Changes like a job in another city or the need for more space to accommodate a growing family do not pose a big problem for tenants.
- Financial flexibility: Suddenly less salary due to a job change or part-time work? As a tenant you can react quickly and find a cheaper rental property.
- Renovations and maintenance: These have to be paid for by the landlord. Your own wallet is spared.
- Economic and financial developments: Interest rate trends, price hikes or real estate bubbles? These issues affect tenants to a much lesser degree than they do owners.
Top five advantages of buying
- Security: No landlord who can give you notice.
- Low interest rates: Buying an apartment is often considerably better value than renting it. This is of the main reasons for the increase in home ownership in Switzerland from 28.5% in 1970 to 38% in 2017*. Sources: FSO – census, structural survey
- Retirement provision: Seniors who live in their own property need not fear rent increases and thus have one less thing to worry about.
- Appreciation in value: Real estate is a solid investment that also offers the possibility of appreciation in value – provided the location is right.
- Planning a self-determined life: The personal freedom to shape your life in line with your own ideas. Whether that involves a pet to enrich your life, red walls in your living room or simply the ability to host people in your own home.
Dream home calculator
Would you also like to fulfil your dream of owning your own flat or house? Then take a look at our free dream home calculator. Based on some information on the financial situation, the desired property and the location, you can find out whether a purchase is already possible – and if not, how long you still have to save for it. If you would like a personal consultation, you can apply for one online.
Buyers are happier – and more committed
There is another factor that speaks for owning property: home-owners are happier people. At least, this is the core message of a survey carried out by the Swiss Federal Statistical Office (FSO 2016). A study performed by Germany’s University of Hohenheim (2017) comes to the same conclusion: owning one’s home or flat has positive effects on social cohesion. Property owners, for example, buy more regional produce, have more friends in the region, are often more involved in neighbourhood goings-on and are also more willing to make donations.
A good feeling is important – as is good planning
These are mainly "soft" factors that speak for a future as a home owner. In order for all the associated positive effects to come into play, however, the "hard facts" must also be clarified with a trusted person.
- Start planning early
- Realistically assess your demands on your home and consider alternatives as well
- Draw up a calculation, including at least 20% equity for the purchase
- Establish a savings plan to accumulate equity
- Compare mortgages and look into affordability in detail
- Do not underestimate running costs, since they affect affordability
Arrange a consultation
A consultation is worthwhile: We take your individual life situation and your wishes as a prospective property owner into account and will be happy to assist you.
You want to know if you can afford property? You can find helpful information in our article: “Turning your dream of owning a home into reality: How you can afford your own home”.
Sources: FSO, Swiss Life study on families and living in 2019, study by the University of Hohenheim (2017), picture: Unsplash
About the Swiss Life study
The online survey on family and living in Switzerland was conducted in May 2019 by the survey institute Value Quest, commissioned by Swiss Life. A total of 875 people between the ages of 25 and 49 were surveyed in German-speaking and western Switzerland, who live in the same household with their partner and children under the age of 18. The results are representative for the target group surveyed.