When you’re thinking about moving, one of the first things that you have to determine is whether you should actually buy a home right now. Is that the right fit for you or should you rent instead?
Most people are going to tell you that you should buy, because if you rent, you’re throwing away your money. Or you’ll hear someone say if you rent, you’re paying someone else’s mortgage. But in some circumstances, it actually can be more beneficial for you to rent.
Advantages of Renting:
The first advantage to renting is that it has a much lower barrier to entry. Though you may need to pay first and last, this amount doesn’t even come close to how much money you would need for a down payment on a house. In addition, your monthly costs are usually quite a bit less.
Secondly, renting allows a far greater sense of flexibility and freedom than owning. Other than your lease – which you may be able to get out of or at least sublet – you are not locked in. After the year is up, you can renegotiate your lease or revert to a month by month contract. If you want to leave at this point, you just need to provide your landlord with sufficient notice.
Leaving a house you’ve purchased isn’t quite so easy. Selling it takes time and effort. Alternatively, you can rent it out, but not everyone has the risk tolerance or ability to be an effective landlord.
Renting requires less money upfront and less long term commitment. Plus, you don’t have maintenance issues to worry about. If the furnace quits working, it’s the landlord’s responsibility to fix it. You also don’t have property taxes, and your rental costs often include at least some of your utilities.
Renting instead of buying isn’t always a choice. If you’d prefer to buy, the posts below might help you through the challenging landscape:
- Drowning in Debt? Here’s What to Do About it Right Now
- Will Any of These Government Ideas Help With Guelph’s Housing Shortage?
- Can You Buy a House With a Poor Credit Score?
Advantages of Buying:
It’s no secret that buying a house is more expensive than ever, in addition to being a more complex process. You want to be confident of what you want, where you want to be, and comfortable with the costs and responsibilities involved with owning a house. That said, there are also numerous benefits of owning a home that you can rarely enjoy as a tenant.
More privacy: When you own a house, you get a lot more privacy. As a tenant, your landlord can enter your space legally – whether you’re there or not – as long as they provide sufficient notice of entry. As the owner, no one gets in without your permission.
The ability to remodel: There are few aspects of a house that can’t be changed over time. For example, if you hate the kitchen, no problem. You can upgrade anything you want given enough time and resources. Strategic renovations can also add significant monetary value to your home. As a tenant, it wouldn’t make sense to perform much more than surface improvements. Even if the landlord allows it, you’d be doing it on your own dime without the equity gains.
Speaking of equity, owning real estate is a fantastic way to grow your financial net worth. Your home is more than a place to live, it’s almost like having an extra savings account since you’re paying down your mortgage loan every month. In addition, you gain purchasing power as real estate values increase over time.
Tax Incentives: There are some tax incentives for owning a home. If you plan to remain in that home for at least a five-year period, Canadian real estate is one of the safest investments that you can make. The great thing is when you go to sell that house, the profit from the sale is tax-exempt.
If you’re thinking about getting out of the rental market and into your own home, the posts below will help guide you along:
- How to Ignore Bad Real Estate Advice Without Losing Friends
- Home Buying Myths Busted: What Really Saves You Money
- The Ultimate Guide for First-Time Buyers in Guelph
It’s Always Personal
So when should you buy or rent? It depends on your life circumstances. With the high monthly carrying costs of home ownership, this is a decision you’ll want to make very carefully. Buying may also not be a choice right now if you already have a lot of high interest debt or will otherwise struggle to obtain a mortgage.
Your decision will also come down to your lifestyle and where you are right now. If you’re not ready to settle and may want to move shortly after, renting may be the better path. However, if you are going to be staying in the same location for around a five-year period, you’ve got a stable job, and you’re ready to take on the responsibilities of a home, buying real estate now could be one of the best investments that you’ll make.
Our Guelph real estate agents can help, whether you decide to rent or buy. Contact us at info@gowylde.ca or call 519-826-7109 to begin the conversation. .
