To rent or to buy – that is the question?
Pick up any newspaper in the last months and you are guaranteed to find an article how some country or other has stopped buying properties due to lack of confidence following the economic crisis and has started to rent property. Whilst renting is the norm in Germany it has nothing to do with the recession- they just prefer it that way. The German government has even made it more advantageous to rent their homes so why should they buy?
In the USA tales are rife of huge volumes of bank foreclosures which have resulted in thousands of people losing their homes and whilst the UK does not seem to have reached the same sort of levels it is certainly a big problem. For the short term people have no option but to rent as, even if their credit ratings were good enough to get credit, the amount the banks are willing to lend has decreased which means people have to save up for their deposit. Here the story is quite clear – for the time being it is a renters market.
Central Europe is a different story altogether as the banks were more sensible and if there is a problem with a mortgage holder they tend to work the issue out rather than go the route of repossessing a property . Even though the pace of property sales has certainly dropped over the last 18 months which has lead to large price decreases this is more a question of caution than lack of money. Cash is king and Central Europeans are very aware of this.
So is this time to start buying investment properties again? If you have the funds then I would certainly suggest that it would be a good opportunity to see what is out there. Beware though because unlike before when investors bought in every new development that was constructed and expected them to rent easily the renters of today have more choice and are more discerning. Location,quality and value for money are the buzz words. Always ask yourself ,would I be happy to live here and pay the money?
Use the services of a quality real estate agent who is knowledgeable in his field is not scared to give an opinion and offers you a full service. A second opinion is invaluable in this type of purchase so make sure you pick someone who will look as carefully at your property purchase as he would his own.