Buy, Rent, or Rent-To-Buy?
Today, I got some bad news... Or, it is maybe good news? For now, let us just call it news... I got an SMS from the real-estate agency where I pay my monthly rent that the landlord wants to raise the rent... Again...
I live in the same apartment for almost a decade, and everything was fine until a bit before this pandemic thing... Just before we got hit by that, my monthly rent was raised by 10%... And now, after maybe 2 years, I got news of additional 10% raise... Well, I'm not some economic expert, but raising the rent in the middle (or maybe just the beginning) of the biggest financial crisis doesn't look like a wise move... Anyways, I don't plan to accept it!
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Firstly, I understand that the landlord can ask whatever it wants, as the property is his, but I find this move dirty and very greedy, as it comes in the worst possible situation... It's not that I can't pay the rent, it is just a matter of principle... The apartment isn't bigger than 50-60 square meters, it's in a building that is 20 years old, but for some reason, everyone finds it "very valuable"...
The problem is in the subjective point of view about the town where I live, and about the real-estate value here... The whole town is built 50 years ago in the place which was an orange plantation, and it had a lot of foreign investors (mostly Norwegian and Dutch) who have invested billions in the market... The town had its peak 15-20 years ago, just before the big real-estate economic crisis... After that, a lot of families were ruined as they had loans for overpriced homes, the complete market was shaken for a year or two...
But, that didn't last too long... The real-estate market recovered and prices skyrocketed again... My landlord wasn't happy too much as he made a contract with me before "mooning", but the idea of raising the rent was still there... So, at the moment, nobody knows where will the real-estate market go... If you ask local agencies, they are all "surprised" how people offer "little" money for the apartments that in "their eyes" are worth 200-250K EUR!!! Yes, the apartment where I live is "valued" as such, with only 50 sqm... Like, WTF?!
As I said, the problem is in "riding a wave"... All these real-estate agencies were living a dream 2-3 decades ago, but a lot of things have changed... Yes, the town had its BOOM time... But, you can't ride the wave forever... You can't milk the same cow for 50 years and not find another one, or a younger one... Yes, we have a sea view, beach... But hey, there are other towns on the seaside!
History repeats itself very often... Sometimes, scarily often... So, I think that what happened with this town 40-50 years ago, will happen in some other place, some other orange plantation soon... The new shiny object will pop up and investors will run there to build as they will have more profits to make... It's always about that...
What will I do? Currently, I am checking my options... We were connected with this town because of our friends and my son's elementary school, but we don't have those bonds anymore, so we will move to another place probably... The only question is will we go for renting or buying our next home... Luckily, crypto has opened both options, but both have their pros and cons... I will take my time with this decision... Maybe it is a good thing that this happened as it is maybe a time to change certain things and this can be just a slight push into the right direction...
What do you think about real-estate prices? Do you rent or live in your own home? What's the better solution from your point of view? I would like to hear your opinion in the comment section...
Thank you for your valuable time,
ph
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