What Fits You? Buy A House Or Rent One...

What to do, Buying or Renting?

When you're researching now, you may not have decided on buying or renting a house in the Netherlands. A rental property may still be the right choice for you.

To help you choose, I've listed some pros and cons for buying as well as for renting a property. 

Buying a House

PROS

Thrift-box

The pros of buying, in the long run, are almost always financial. Your house will become a money-box. In the long run a house will probably go up in value (although nobody will guarantee this).

You may even get some tax-relief when the house is your main residence. This way the tax-authorities help pay for your house.

Long term
When your mortgage is finally repaid (usually this will be after thirty years), the house is all yours! You don't have to pay the bank, so you'll live for free.

You'll still have to pay for water, gas, electricity, maintenance,  etc. But the house is free. 

Short term
Other pros have to do with freedom.

With your own property you're free to do as you please. Want to change the layout? Or build a new kitchen? You don't have to ask permission to a landlord.

And the value you create is yours.

Comfort 
Apart from freedom, comfort may be important to you.

When you buy a house, you're free to add as much comfort as you need. You're allowed to add insulation where and when you want to. And paint everything, using the colors you like. Improve the heating whenever you want. And add a fireplace if that makes you feel good.

As long as its ok according to law and regulations, you can do anything you think of.

And the best thing is, nobody will tell you to undo the changes when you're selling the house.

Renovations add value
You may want to improve the building or add extensions to it (not easy with rental property). This may add even more value to the house.

When your house goes up in value, you don't have to suddenly pay more for it (as opposed to rental properties).

You pay for the mortgage, which doesn't change.  

Choice of property
The best thing is, you'll have a lot of choice. There are all kind of houses for sale in lots of different places.

There's probably one suited for you too. 

CONS

Costs
You'll have to pay a lot of money to get your own house. Ofcourse you may finance this using a mortgage. But still this is a lot of money.

You'll also pay lots of money in taxes and added costs. When you buy a house for two hundred thousand euros, this will be about twelve thousand euros. 

This money is gone forever. And no-one can predict whether or not you'll win this back by increasing houseprices.

So, when you intend to relocate soon (work related or just for fun) you may be better of renting. 

Maintenance
With your own property, you're the one responsible for maintenance.

No landlord to call when there's a problem. And you'll have to pay for it too. The cost of maintenance will at least be about one percent of the value of the house per year. But this will differ wildly per property and per owner. 

I've seen averages of twenty five hundred euros up to five thousand euros per year. This will be very different for different houses. 

And it includes everything, from repainting the window frames up to maintaining the central heating system.

You'll need a good contractor or handyman and maybe a gardener (or do it yourself?). 

Tied to a house
When you want to relocate, you'll have to sell your house.

If the time is not right for selling, you'll have a problem. In the Netherlands, some houses have been for sale for over five years now (2016). 

And lots of houses have been sold with a loss in recent years.

Want to avoid this? Don't buy a house at all.

Renting a House

Security
With renting, the advantage will mainly be the financial security.

You pay the rent and you don't have to worry about the maintenance of the house. The landlord pays for the maintenance.

Even when there's a huge maintenance issue, the landlord has to pay the bill.

Housing Benefit
When you rent a house in the Netherlands, you may be eligible for a subsidy for the rental costs: the rent supplement.

When you spend a large portion of your income on rent, this may be for you. There are some conditions that have to be met. 

You may apply for the rent supplement at the Dutch Tax Administration. You can read more about this here (dutch language only)

Less supplemental costs
You'll pay less in insurance costs. All of the insurances involving the ownership of the house, will have to be paid by the landlord.

And being a tenant, you'll pay fewer taxes than the home owner as well.

These may not be huge amounts, but every little bit helps.

Flexibility
When you're renting a house, you'll be able to relocate quickly.

Give notice to the landlord (usually you'll have to pay one ore two more months) and you're free to go.

Make sure the notice of cancellation of the tenancy agreement is valid. 

CONS

Rent keeps rising 
The rent is rising in the Netherlands. Every year you'll pay a little more for use of the same house.

If this continues for several years, you'll end up spending more and more on your rental property. 

Money down the drain 
The money spend on renting is lost forever.

Well, ofcourse you have a roof over your head. But otherwise it's gone. And after thirty years you'll probably pay a lot more rent than you do today.

And still don't own your home. 

Landlord
You'll need permission for adjustments. And you can't expect to get permission easily.

You're not allowed to make one big room out of two little ones. And in order to place a dormer, you'll also need permission. 

So when you're looking at rental properties, make sure it's already good enough for you. 

Restoring it
When you're moving out of the house, you'll have to restore it. The house has to be the same as when you occupied it. Every change you may have made has to be undone.

Did you paint the wall in pink? You'll have to restore it to white again. Did you change the kitchen? Restore it to the original.

Make your choice

I've shown you some ideas on buying a house versus renting a house.

And you've seen that different preferences will lead to different choices. 

I hope this page has made it easier for you to choose.

Choose wisely!


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