The choice between buying a home and renting one in Muscat is among the biggest financial decisions that you will face in your life. But the costs of buying are more varied and complicated than for renting, making it hard to tell which is a better deal. To help you answer this question, our table takes the most important costs associated with buying a house and computes the equivalent monthly rent.
The table is based on a 25 year loan with 5% interest rate and 20% initial home deposit.
|Home Price OMR||20% Deposit||Equivalent Monthly Rent|
The other option is to consider is starting small and move to a bigger house after few years when your income increase. For example you can start with a two bedroom apartment in Maabela or Al Amerat which can cost below OMR 50,000 and sell it once you family and your income grow. Another option to consider is taken a combine loan with your wife.
Muscat home recommend first buyer to shop around not only on which area to buy also which bank to get the loan from. The options are vast considering the commercial and Islamic bank currently available in the market.
A lot of people don’t have an idea whether to buy a property or rent, and when is the aappropriate date to enter the property market.
But the result, no matter how carefully and clearheadedly you approach the exercise, is more a starting point than a conclusion about your optimal living situation. It will give you a good look at the financial dimensions of your decision. But housing is about quite a bit more.
The factors underlying your calculation, where you can adjust assumptions, are important. But you also need to think deeply about these five other things that don’t easily plug into that financial model.Is the home you are buying permanent or only for a short period of time?
One of the nonfinancial benefits of buying a home is that you know you can live in it indefinitely. You don’t have to worry that the landlord will raise your rent 20 percent, or demolish the building to turn it into something else, or just kick you out for his son to move in. You can renovate the kitchen or paint the shutters according to your preference and yours alone.
So what is that worth to you? This is a question that defies any attempt to analyze using a spreadsheet. It is purely a question of your preferences and priorities in life.How confident are you that you will want to stay?
One of the biggest factors shaping the desirability of buying versus renting is how long you will stay in a place. Given the huge costs, both financial and psychic, of selling a house, it is generally a far better deal to buy if you will live in a place for a decade than if you will be moving in three years.
But simply putting your best guess of how long you will stay gives you a limited view of things. We all actually have a range of possibilities. What are the odds that a year from now you will get offered a dream job in Sohar or Salalah, or meet the love of your life who already has a great place, or conversely go through a break-up or divorce?
Our best plans are still only guesses, but some people are more settled and less likely to have a sudden move than others (a person who is absolutely committed to staying in his or her current city, for example, or a happily married couple with all the children they want). Be honest with yourself about how settled, or unsettled, your future living situation really is.
One of the advantages of renting is that if your earning power suddenly changes, it is relatively easy to adjust your living situation accordingly. Lose your job and have to take a pay cut to find a new one? That isn’t much fun, but it’s less painful if it results in moving into a smaller apartment rather than having your house foreclosed upon and your credit wrecked.
That’s all a case for being conservative when thinking about your future earnings. If you earn a commission or bonus, how variable is it? Don’t assume that one good year will be repeated forever. Do you work in an industry that is healthy and growing, or one in which layoffs are happening all the time? If you lost your job, how hard would it be to find a new one, and would you probably be paid more or less than you are now?
The more confident you are in your future earnings, the more comfortable you should be taking on that home mortgage.Can you force yourself to save?
One of the real, if underappreciated, benefits of buying a home is that it forces you to save. A typical mortgage pays itself off bit by bit over the 15 or 30 years you are making payments. With modest appreciation in the value of the home, at the inflation rate or a little bit above, people who buy a house in their 30s and stay there can end up with quite a valuable asset, debt free, in their 60s.
But there’s no reason you can’t also save while renting a home. You have the money that would otherwise have been your down payment as a starting point, and then you can easily transfer a few hundred dollars each month into a brokerage account and put the money into stocks, which historically have higher returns than residential real estate.
But will you? One risk for people who elect to rent is that they could lack the discipline to save that way, and so could find themselves at retirement age owning neither a free-and-clear home nor a well-stuffed brokerage account. If you know you’re tempted to spend every last dollar in your paycheck, buying could provide some extra advantage.
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