Should You Buy or Rent?
When you’re thinking about buying your first home, 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?
Most people are going to tell you that you should buy and that 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:
Lower barrier to entry, your monthly costs are usually quite a bit cheaper, and you don’t have to pay a down payment.
More flexibility, for those who are not committed to a certain city or that like to travel you can do a month to month lease allowing you to move quicker.
Fewer Expenses, you don’t have to pay any of the maintenance, property taxes or additional costs.
Advantages of Buying:
Privacy: when you own a house, you get a lot more privacy & more flexibility for what you want to do with that home.
Equity: a home is also great for savings, as you’re paying down your mortgage loan every month.
Tax Incentives: There are some tax incentives for owning a home and if you’re going be staying in that home for at least a five-year period, Canadian real estate is one of the safest investments that you can make.
So when should you rent? Well, if you haven’t quite settled down and you’re not sure if you’re going to be staying in the same location for an extended period, you may want to rent. Also if you can’t afford the monthly carrying costs of home ownership or if you have a lot of high-interest debt, like credit card debt, you may want to pay that off before taking on a mortgage.
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, that could be one of the best investments that you’ll make. The great thing is when you go to sell that house, the profit from the sale is tax-exempt.