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Renting or buying – is owning your own home really worth it?

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Tailor-made solutions for investment, insurance and finance

Renting or buying – is owning your own home really worth it?

Digital innovations - Tax-optimized investments - Individual consulting

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Renting or buying – is owning your own home really worth it?

The decision between renting and owning is a major concern for many people. Owning a home represents stability and independence – especially in times of constantly rising rents. However, this is offset by high purchase prices, increased financing costs, and a long-term financial commitment. Furthermore, ownership often means less flexibility. Whether buying a property is worthwhile depends on numerous individual factors: personal life plans, financial situation, and future goals.

Renting or buying a property: Which suits your life situation better?

More independence, more space for the family, or a long-term investment in retirement – there are many good reasons to buy a home. But however tempting the advantages of owning your own home may be, the decision should be carefully considered. Renting also offers clear advantages: no debt, lower financial risk, and greater flexibility. Whether renting or buying is the better choice depends heavily on your personal circumstances, financial resources, and individual future plans. Both options have different pros and cons – which one outweighs the other is ultimately a very personal decision.

Renting a house or apartment: Advantages and disadvantages at a glance

Those who rent benefit primarily from flexibility and low financial commitment. Here's an overview of the most important advantages:

Advantages of renting:

No long-term debt through real estate loans
Flexibility in case of job change, separation or relocation
No costs for repairs or maintenance.
No need for reserves for unexpected expenses
Fixed monthly costs that are easy to plan.

Disadvantages of renting:

Dependence on potential rent increases
Termination by the landlord is possible
Limited design freedom in the apartment
No wealth accumulation – the rent paid is gone.
No security in old age through rent-free living

Owning a home offers numerous advantages: homeowners are independent of rent increases, build wealth, and simultaneously provide for their retirement. Once the mortgage is paid off, rent payments are eliminated in retirement – a significant relief. Furthermore, homeownership offers maximum freedom: furnishings, renovations, and alterations can be implemented according to one's own wishes. Those who also rent out parts of the property can even generate passive income and pay off the mortgage faster.

However, homeownership also comes with significant responsibilities: Financing often extends over decades, reserves for repairs and maintenance must be set aside, and being tied to a specific location limits personal flexibility. Therefore, anyone wishing to acquire property should have stable financial circumstances, a clear plan for the future, and a solid credit rating.

Renting vs. Buying – Cost Comparison over 25 Years

You live in a small town and are considering whether to rent or buy an attractive 100 m² apartment. The apartment is conveniently located near shops, doctors, and pharmacies – a popular location suitable for both living and investment.

1. Monthly charge

Type of cost	Rent	purchase
Rent / Loan payment	€1,200	€1,600
extra costs	€300	€450 (including reserves)
Total monthly cost	€1,500	€2,050

2. Total costs after 25 years

Type of cost	Rent	purchase
Annual burden	€18,000	€24,600
Total costs after 25 years	€450,000	€615,000
Do you own property?	No	Yes
Ongoing costs after 25 years	€1,500/month	€450/month

3. Long-term compensation (with the rent remaining the same)

aspect	Value
Break-even comparison between buying and renting	After approximately... 34 years
Total costs of rent until the purchase price equals the total cost of ownership	approx. €615,000
Wealth building through real estate	Yes
Rent-free living in old age	Yes (after 25 years)

Those who plan for the long term benefit from buying despite higher initial costs: After the loan is paid off, the monthly payments decrease significantly. Furthermore, you own the property – as retirement savings and potential capital appreciation. Renting, on the other hand, remains more flexible, but is more expensive in the long run and doesn't build wealth.

When is renting a better option than buying?

Renting can be particularly useful if you want to remain flexible, don't want to make long-term financial commitments, or haven't yet found your final place of residence.

Renting can also be financially worthwhile – especially if your rent is relatively low. If rents remain stable or only rise moderately in the foreseeable future, this can pay off in the long run. However, it's crucial that you invest the money you save compared to buying property strategically – for example, in ETFs, stocks, or other investments. Homeowners have a paid-off property at the end of the mortgage term, which serves as part of their retirement savings. Renters, on the other hand, who don't save or invest anything, often end up at a disadvantage in the long run.

When is buying a better decision than renting?

Buying a property can be particularly worthwhile if you're planning for the long term, are willing to commit to a location, and have sufficient equity. A further requirement is that you can reliably manage the monthly costs.

As a general rule of thumb: The mortgage payment should not exceed 30 to 40 percent of your net income. If, after deducting the mortgage payment, closing costs, ongoing expenses, and savings, enough money remains for your daily life, the financial conditions for buying a property are favorable.

Furthermore, homeownership offers a significant advantage: it's a building block for your retirement savings. Those who don't have to pay rent in retirement have considerably more financial flexibility – and benefit from the security of living rent-free in their own home.

Buy or rent? Get advice now.

The question of whether renting or owning is the better choice can't be answered with numbers alone. For many, it's a significant life milestone – and should be carefully considered. Independent advice provides you with the necessary overview of your financial situation and your options. This way, you'll learn exactly what's possible – and what you should pay attention to.

Our BK advisors will help you save time and energy. We'll explain your options clearly and transparently, so you can make a well-informed decision. Rely on our professional assessment and a thorough analysis of your personal and financial situation.