KeithL wrote:Just had a question regarding property – Would it be more economical to buy an apartment on mortgage rather than pay monthly rents ? are the mortgage payments equal to or almost similar to rents in the same area ?
This could also be advantageous in the long run with property price appreciation.
In most cases I'd say mortgage payments will be similar to or less than rental payments for equivalent properties. For example 1 bdrm Greens apartment cost about 850,000 dhs. Put down 200,000 dhs and pay off 650,000 over 15 years at 8% interest (on reducing balance). Approximately 70,000 - 75,000 dhs per year. Rental is 70,000 to 80,000 for same apartment. So actually, when you factor in the 200,000 dhs down payment, mortgage payments are higher than renting but you do own a property at the end of 15 years. Maybe my calculations are out, was doing it off the top of my head. Too lazy to find a calculator
.
Certainly makes sense if company pays accommodation allowance and you can put it towards a property purchase.
But whatever you buy now, you may have to ride out a decrease in value during the next year or two. Or not. Demand for rental property is still high but there are a lot of speculative property owners around at the moment looking for short term gains.
There's a fair bit more discussion on the subject
here.
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