by Amanda Ines

Created on: June 02, 2010   Last Updated: June 04, 2010

How to choose whether to rent or buy a home? This question all comes down to how much money you already have in your bank account, how much money you earn and whether you plan to stay in the area permanently, or at least in the near future.

Another thing that one has to bear in mind is that while paying rent enables you to have a home in which to live in, you don't progress anywhere with this strategy. You pay out money each month which you will never get back. Although the property that you live in may rise in value this will not benefit you in any way, and most important of all - if the property that you rent goes up in price so likewise will all the other properties around it go up making it even harder for you to buy your own one day. Because once you buy a property you have already put one foot in the ladder.

What does putting one step in the ladder mean? It means that even if you only acquire a very humble and cheap property, due to inflation (not so true at this moment of time, but it used to be!) that property will rise in price and more so if you put a little of your time and effort into improving/reforming it. You can then try and sell it on at a higher price and with your return buy yourself a better and more expensive property. This is a continuous chain and with clever decisions on the choice of property that you buy, can end up leaving you as an important property owner. Important in terms of the price and prestige of your property.

When the financial world is crashing to the floor all around us it is comforting to know that whilst you may not have loads of cash in the bank because you are maybe out of work, that you are sitting on your nest egg. If things got really bad, your property is your safe guard which you could sell if you really needed to for cash.

1. The 'You've got enough money in your bank account' scenario If this is your case (and you do plan on living in the area for the near future) I would suggest that you go for buying a property right out. You can reform it, make it look better than it did when you bought it and you have already increased its value. You can live in it for as long as you want. Not have to worry about mortgage prices rising. And the day you need to sell, it will presumably have gone up in price, due to your reformations. At this point you can either buy another humble place and do the same thing over again, while keeping your profit in the bank to add on to your every day needed expenses or you can go for a better

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