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Unsure whether renting or buying is the better choice for you? Many Canadians have this debate and struggle with this decision at some point in their lives. Both options hold lots of appeal, as well as some challenges. If you want a breakdown of each, here’s what you need to know!
The pros and cons of buying
When deciding between renting or buying, making a simple pros and cons list is often a great place to start. This is a logical and effective way to help you make your decision. Let’s begin with the advantages of buying. For many people, the idea of holding equity in the housing market is appealing, because it allows them to leverage their position in the future, knowing they own a valuable asset. It’s certainly handy to have the ability to sell one home and use it to finance the purchase of another in the future. Another big benefit of being a home owner is having the ability to personalize your home to your needs and wants. You are free to complete any renovations or superficial makeovers you want, which makes a home truly feel like your own. Finally, if you know where you want to settle down, buying a home is a way to secure yourself in that location. Having this kind of anchor is very comforting for many home owners.
Of course, there are also some challenges involved with owning a home that are important to consider. Most obviously, you need to think about the costs. Buying a home requires you to save for a down payment, closing costs, mortgage payments, and maintenance expenses. This can be a barrier for many potential buyers, especially in today’s climate of high interest rates. There is also the sheer amount of responsibility home owners hold over their property. They are on the hook for any repairs or replacements, and for keeping their home in good condition. Buying a home requires a lot of planning and consideration, and of course, the help of a mortgage professional!
What does an ideal buyer look like?
Not all home owners are the same. However, there are some common traits that ideal candidates have in common. The best home owners will be financially prepared to take on this major expense. They will know where they want to live long-term, and they will be up for the challenge of maintaining an entire property. Home buyers should feel confident that they are ready for the housing market, and most importantly, homeownership must be something they truly want!
The pros and cons of renting
Now, let’s look at the other option in terms of renting or buying. Renters also enjoy many benefits without owning a property. First, there is much more flexibility in rental agreements than mortgage contracts. Many renters live on a year-to-year or month-to-month contract, meaning they have more freedom to relocate without penalties. They are also not responsible for repairs or replacements of items that came with their unit, as long as they are not at fault. For example, a leaky sink or broken stove is on the landlord to fix, which saves renters tons of money in maintenance costs. Overall, renting is a less expensive housing option than buying, which is a major draw for many people.
On the flip side, we have some drawbacks associated with renting. For one thing, renters do not get to build equity in the housing market. While home owners and renters both have homeownership costs, renters do not benefit from owning an asset with value. Second, renters are much more limited in terms of what they can do with their space. They do not have the freedom to renovate or make major changes, which can be a real drawback for some people. Finally, in apartment buildings that are not rent controlled, tenants can experience skyrocketing rent increases from year to year. The instability of rent prices is a source of discomfort for many renters.
What does an ideal renter look like?
A good candidate for renting is someone who does not wish to settle down in one spot permanently, and is not interested in completing home renovations. Otherwise, most people who are ideal home owners would also make good renters. At the end of the day, the decision between renting or buying comes down to personal preferences and finances.
If you are unsure whether renting or buying is the right choice, it’s important to reach out to a mortgage broker! We can help you evaluate your situation and your goals for the future to determine what might make most sense for you.
If you have any questions about your mortgage, give us a call at Centum Home Lenders! You can reach us at 506-854-6847, or get in touch with us here.