Should I buy or rent a house?
Buying a house: building wealth and security
Buying your first house is one of the big milestones in life. With the right conditions and a mortgage, it is the start of a good investment in your future. In addition, you are assured of stable monthly payments for a long period.
By owning your first house you start building up a capital for a longer period of time. If the house is initially fully collateralised for your debt, it slowly becomes your property. The fact that you already have a mortgage, you have paid off part of your debt and your current home may have increased in value, creates new opportunities for another home in the future
Pay for maintenance and renovations yourself
Because you are the owner of the house, you can also adjust it according to your own insight. Breaking through a wall, a new kitchen or bathroom, everything is possible. However, this also means that the maintenance of the house is for your own account. It is important that you have a financial plan to keep the house in good condition over a longer period of time. If you buy an apartment, part of a larger building, you pay a monthly contribution to the joint maintenance of the building through an association of owners.
Real estate tax (OZB)
An owner-occupied home also means that the municipality in which you live imposes a tax based on the value of your home (WOZ value): the real estate tax (OZB). The higher the WOZ of your house, the more municipal tax you pay.
Renting a house: free as a bird but at higher costs
If you rent a house, you have more freedom to change that situation in the short term. With usually a month’s notice you can easily move from one rental property to another. This gives you a lot of freedom of movement in choosing a home in another city, state or even country. You do not build up any capital with the monthly rent.
No maintenance costs
In the Netherlands, maintenance for a rental property is the primary responsibility of the landlord. You are not allowed to make major changes to the rented home yourself. On the one hand, this saves you maintenance costs, and on the other you will have to wait for maintenance or repairs until the landlord takes action.
Rental homes in the Netherlands can be divided into two groups: social rent and private rent. You can rent social housing from housing associations. There you pay a rent that is legally bound to a maximum. To be eligible for this rent, you must meet certain income conditions.
If your income is above the conditions for social rent, you can rent privately. Here the rent is based on the market value of the home and is not bound by a legal maximum rent. Private rents are therefore much higher than social ones.
Rising rental costs
The rent for both social and private rent can be increased annually by the rental association or landlord respectively. Social rent increases are subject to a legal maximum. The increase in private rent is not and is usually determined on the basis of agreements in the contract with the landlord.
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