
To rent or to buy?
It has become a popular topic- should you rent or
buy a home? It's a good question, but with no clear answer.
Take a look at your current situation. If you're
single- living in a high-priced market like Vancouver or Edmonton and have a
job with an average salary, then maybe it's smart to rent for now. However, not
all markets are pricey and everyone's situation is unique.
Families with children usually prefer owning. The
stability of ownership and providing a good home for the kids becomes a
deciding factor. Having two incomes in the household can make mortgage and
housing payments more manageable. If commuting isn't a problem, house prices
outside a major city center offer more value- bigger houses for lower prices.
Here are a few pros and cons to buying a home;
Pros-
Offers long-term benefits of security, equity and
potential growth in personal wealth. Also a home's equity value will appreciate
over time- when it comes time to sell, you'll earn a profit.
A house is your legal property, which allows your
greater freedom than a rental property. You can alter the property, including
decor changes, landscaping and renovations to suit your own needs or style.
You have the option of becoming the Landlord by
renting a portion of or the entire house. This allows you to generate income
and help pay the mortgage.
Cons-
It's a huge financial responsibility
There's additional costs to owning a home- taxes,
insurance and maintenance
You run the risk of not making any profit through
resale
You are less mobile than a tenant
Here are a few pros and cons to renting
Pros-
Flexibility. Renting requires no long-term
commitment from a tenant, and is the best option if you don't intend on staying
in one place for a long time.
As a tenant, there is the possibility of living in
an area in which you could not afford to buy
The only insurance you need is to cover your own
stuff in the house (content)
Cons-
You are bound by the rules of the lease, which can
impact your freedom to use or renovate the property.
Renting offers no wealth creation or return
investment
You have no control over annual rent increases
There is no guarantee that a lease will be renewed
when it expires
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