Episode CF07 – Real Estate Renting Vs. Buying

Episode CF07 – Real Estate Renting Vs. Buying

Hello and welcome to another episode of the Financial Independence Europe Podcast! Today Mathias, Michael and Ines have a chat about real estate, discussing if you should buy or rent the property you’re living in. Lots of food for thought about the costs and benefits associated with buying and renting real estate properties. Enjoy!

We also talk about:

  • Negotiating
  • Being a ‘real estate person’
  • ’Love-related’ costs
  • Fixing stuff


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The hidden costs of buying real estate properties

When comparing renting and buying people tend to use the renting price and the mortgage monthly rate, but this is only part of the picture. In addition to the interest rate you pay to the bank there is also the transaction cost, and in many countries there are taxes associated to it. Moreover, maintenance costs are now on your part: and the real estate market can fluctuate widely depending on many factors, including political choices – which makes it hard to optimize the investment.

The flexibility of renting

While owning a house ties your lifestyle to that particular setting, renting gives more flexibility and the option to choose a house that fits your life choices at that particular moment, optimizing costs for example by choosing a house near the workplace, choosing exactly the number of rooms you need and so on. And once you decide to change job, move to another country or live with another person you simply move on to another place. This optimization aspect should be particularly appealing to FI people

BTW: Open a mintos P2P lending account with us and get 0.5 cashback for your first investments. We get a small commission at no additional cost for you. More info here.

Real estate buying as an investment

A whole different topic is buying a house to rent it to others, as a form of investment. Ines stresses that it’s necessary to enter a completely different mindset in this case: using the same approach as when looking for a home for ourselves will lead to make risky decisions, while it should be considered as any other form of investment and analysed accordingly. With this caveat in mind, real estate can be a very effective investment strategy.

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