When analyzing the profitability of both solutions, website experts took into account transaction costs, i.e. court fees, notary fees, agency fees and tax (about 6 percent of the price) related to the purchase of an apartment. They also assumed an additional expense for the need to refresh the premises, in the amount of 10 percent. its prices. In addition, there is interest on the loan taken for the purchase of real estate.
When renting, rents are the cost (without administrative fees and those for utilities). “In addition, it is clear that the buyer of the apartment has to allocate much more money for the own contribution to the loan than the tenant for the deposit. Therefore, in our calculations, we also include interest on money that, as tenants, we did not spend on our own contribution to the loan, but placed it on a bank deposit. – we read in the material of Bartosz Turk from HREIT.
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HREIT
As NBP data necessary for the calculations have been available since the third quarter of 2006, this date was adopted as the moment of purchasing a flat or making a decision to rent a property. At that time, it was enough to spend about PLN 312,000 to buy an apartment in the capital. zloty. If you add 16 per cent. of this amount for handling the transaction (tax, court fees, notary public and agent) and refreshing the premises, the total cost of purchase would additionally increase by almost PLN 50,000. zloty.
If, in addition, the apartment was purchased on a loan with a 10% own contribution, then in the third quarter of 2006 it would be necessary to borrow a little over PLN 280,000. Interest on this amount until the end of 2022 would amount to less than PLN 166,000. results from the calculations of the HRE expert. They also include credit holidays.
For comparison, renting a similar apartment at the same time would cost almost three times more than the interest required by the bank, i.e. almost PLN 454,000. zlotys. This is the amount that would have to be paid in the capital in the years 2006-2022 for renting a 50-square-metre apartment. Such a comparison already shows that the purchase in the years 2006-2022 was a much more advantageous solution than renting. But that’s not all.
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Unlike the tenant, the owner would also have a flat of considerable value. According to NBP data, an average 50-meter apartment in the capital was worth over PLN 600,000 at the end of 2022. zloty. So if the owner decided to sell the property, he would have almost PLN 428,000 left after paying off the mortgage. As the HREIT expert notes, the only advantage of renting is that the deposit required by the owner when signing the contract is much less than 10%. own contribution to the loan. If the tenant “saved” in this way invested the money in the bank, from the third quarter of 2006 to the end of 2022 he would earn a little over PLN 15,000 in interest. zloty.
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HREIT
“What is the balance of all these calculations? If we compared the property of the owner and the tenant after many years, it would turn out that the portfolio of someone who bought a flat on a loan is almost PLN 651,000 thicker than the portfolio of the tenant. From the third quarter of 2006 by the end of 2022, this gives an average of PLN 40,000 per year for the benefit of the owner.
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