The Big Question: Renting Vs Buying in 2018?
If you are looking for a place to call your own, that will have stable payments and be a great long-term investment then buying may be for you. If you want to be able to move frequently, and benefit from amenities without having to deal with upkeep then renting may be for you. At the bottom of the article, there is a calculator to financially compare Rent Vs Buy.
Benefits Of Buying a Home Vs. Renting
1. Get Pride in Owning Your Own Home
Provides you with the ability to do whatever you desire with your house. For example, paint the walls, attach permanent fixtures, plant gardens, etc. The options are endless and completely up to you.
2. Appreciation in Value
Over the years real estate has consistently appreciated. On average 5% per year (in Guelph), making it a stable investment for you.
3. Build your Equity
Owning a home allows you to build the equity in addition to the appreciation that you will acquire. Paying a mortgage forces you to save by investing in an asset over time. A first home often leads to a superior second home. It is much easier to upgrade to a second home than to wait and save money while renting to afford a nicer first home.
4. Borrowing Power for Future Investments
You can borrow money against your home, therefore, it increases your buying power. This can be in the form of a loan or line of credit. This borrowed money could then be spent to complete upgrades to the home or to purchase an investment property.
5. Stability
With a fixed mortgage, you are aware of what your monthly payments will be for the entire term of the mortgage. Whereas, as a renter, the rent could increase at any time or the landlord could decide to sell the property.
Benefits of Renting a Home vs Buying
1. Renting is Easy
Compared to owning a home, renting is fairly easy. When you own a home, it is 100% your responsibility to fix/replace any damages or broken appliances. However, as a renter, you are able to contact the property manager or landlord if anything goes wrong. In addition, snow removal, lawn maintenance, pool/sauna care, etc. are often the responsibility of the landlord/ property maintenance company. Yet another benefit to renting is that you will (usually) only have one monthly rent payment, instead of several bills and fees as a home owner.
2. Maximum Flexibility With Your Lifestyle
Renting provides you with flexibility when it comes to relocating. As a renter, you have the ability to pack up and leave immediately at the end of your lease. Whereas, as a home owner, it could take several months to sell your home.
3. No Large Up-Front Payments
Renters normally only need to provide first and last month’s rent upfront while home buyers will have to provide a down payment of at least 5% of the value of the house, pay lawyer fees, etc.
4. Amenities in Building
Depending on the rental property, certain amenities may provide social, business and fitness opportunities for tenants. For example, after school programs for kids, business centers, fitness centres with personal trainers, games rooms, theatre rooms, ATMs, swimming pools, etc.
5. No Unexpected Expenses
Renters can avoid the unexpected expenses associated with owning a home, such as servicing the furnace, fixing a leaky roof or replacing an appliance.
Both renting and buying a house have their benefits and downfalls. The decision isn’t as simple as comparing rental costs to mortgage payments. It is a combination of all of the personal occurrences involved in your life – both now and several years down the road.
Globe & Mail has created a calculator to financially compare Rent Vs Buy. Click here to try it out.
(Articles based off Jean Folger, Renters Guide and Mellisa Ezarik, Benefits of owning a home)
