“A lot of people spend the money they've earned… To buy things they don't need… To impress people they don't like.”
– Will Rogers
Before entering university to study architecture, I worked in real estate and I really liked the subject, I worked as a secretary. After I entered the university I returned to work in the area, now in the development specialty, then I went to a construction company where I learned a lot about real estate investing and feasibility studies. And this real estate universe helped me to design for my clients in order to produce properties with good characteristics for sale and/or for rent.
I left my parents' house when I was 21 years old, when I went to college, living with my boyfriend (now my husband) and I didn't have my financial life planned. At the time I only had one option: to live on a rent.
Usually when we leave our parents' house, we are left with the greatest doubt: Buying or renting a house? This is a constant doubt, as it does not only involve the financial universe, but an emotional decision for the first big step of an independent life.
So how do you organize yourself so you don't get stuck?
We can say that we must evaluate our short and long term goals that will be your goals at the end of the achievement of these goals, which is possibly the realization of a dream.
Getting real, everything will depend on your FINANCIAL ORGANIZATION, something that most Brazilians don't have much organization, right? Considering that young people currently have been leaving their parents' home (without being more dependent on them) for an average of 25 to 34 years, we can say that today is a very good time to organize for this big change.
So we should seriously think about the possibilities: BUY (finance/consortium) or RENT?
To decide to buy, you need to consider several issues and the first one is the reserve fund, because, unlike rent, the loss to finance this property will be much greater if you don't pay the installments. When you buy a property, you practically become a tenant at the bank where you will pay rent (interest) for the money you borrowed. Usually at the end of 30 years you will pay almost 4 properties in interest. DON'T LOSE HOPES! It has a solution to be a good investment.
In order to be good and not have so much loss, it is very important to have at least 30% of the total value of the property to sign and have 12 months in reserve in the bank with the total value of the installments (within these 12 months), as this helps Lower interest rate lower and avoid unforeseen problems.
Another question is to know how much responsibility you want to have to manage and maintain an asset, such as: taxes, fees, maintenance and others.
If you are a person looking to get to know other states, countries... maybe the best option is to live on rent, which allows more flexibility in decision making and thus invest your money in investments, so in the future, when you decide to buy, you won't be so tied by the interest funding.
It all depends on your state of mind!
In my case, as I left home very early, I lived for many years on rent until we felt the need to buy our first property, in a place that was not our ideal dream, but that was very worthwhile financially. We bought for a down payment of 15k + 30k in installments, remodeled with 70k and sold for R$270k, we lived in this house for almost 2 years, there was so much offer to sell the house (because the renovation project attracted a lot of attention – renovate the house with a professional help to greatly enhance the property) that we use to sell.
What influenced my decision to wait 11 years to buy the first property and which could also influence the decision of many young people?
The personal moment and future plans.
If you want to move to another city, have a career that allows you to transfer easily, if you want to start a family... all of these must be taken into consideration.
IF YOUR QUESTION IS FINANCIAL ONLY... Thinking of helping you, I'll release a spreadsheet so you can see from the FINANCIAL POINT OF VIEW if it's advantageous to buy or not. CLICK HERE TO DOWNLOAD THE WORKSHEET!
About the Author:
Grasiela Mancini is an Architect & Urban Planner, graduated from the USU – RJ (Universidade Santa Úrsula) in 2001 and since her formation she has made dreams come true in the form of real estate!
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