Rent or buy on credit?  One of these options pays off the most

According to HREIT, it was more profitable to buy an apartment with a loan than to decide on rent. The calculations took into account transaction costs, which are an expense of 10 percent. Apartment prices for retrofitting and renovation purposes and interest on the loan. In the case of tenancies, rents are taken without management fees and interest on money which the tenants will not spend on their own contribution to the loan, but will be held in a bank deposit.

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Buying and renting an apartment is much more profitable

In the third quarter of 2006, according to the data of the Polish National Bank, approximately 312,000 PLN were required to purchase an apartment in the capital. PLN, taking into account additional costs – the price will increase by PLN 50,000. zlotys. Assuming that the private contribution will be 10 percent, the loan will amount to about PLN 280,000. PLN, and the interest until the end of 2022 will amount to less than PLN 166 thousand. zlotys.

Renting a similar apartment at the same time will cost almost three times the interest rate demanded by the bank – say HREIT analysts.

“Taking into account the data of the National Bank of Poland, the average price of a 50-square-meter apartment in the capital was more than PLN 600,000 at the end of 2022. So if the owner decides to sell the property, he will receive approximately 428,000 free cash after Pay off the mortgage. The only advantage of leasing is that the deposit required by the landlord when signing the contract is much less than the 10% private equity contribution to the loan,” the analysis states.

I add that if the tenant “saved” in this way and invested his money in the bank, then from the third quarter of 2006 to the end of 2022 he would earn just over PLN 15,000 in interest.

what does that mean? If the property of the landlord and the tenant is compared, this will come out The wallet of the person who bought an apartment on credit is approximately PLN 651,000. PLN is thicker than a renter’s wallet. “From the third quarter of 2006 to 2022, this gives an average of 40,000 PLN per annum in favor of the owner,” we read.

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