Why rent? Why buy? Hmmm……
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  • Why rent? Why buy? Hmmm……

Why rent? Why buy? Hmmm……

The debate over renting vs. buying is a question on many people’s minds.  “Is buying a home what I really want to do?  Or is renting a more stress-free way to live, without the worry over home maintenance, property taxes, and meeting mortgage payments in uncertain times?”

I guess this really depends on each individual person’s own wants and needs.  Financial stability and lifestyle are two major factors in making the very personal decision of whether to rent or buy.  As an investor, certainly purchasing a property to rent is an excellent investment.  Better than any other investment to be made, in fact.  As long as you practice due diligence in getting credit checks, interviewing the prospective tenant personally, and following up on good references, being a landlord can be a good way to build equity toward future financial stability.

That said, buyers who purchase a home – be it as a primary property or an investment – need to be sure to work with professionals to see if this is the right move for you.  Getting pre-approved for a mortgage is the first important step.  Your mortgage advisor will help you know what you can comfortably afford.  He or she will calculate what price range you qualify for, what your down payment will be, and estimate your closing costs.  With this, you will be given an idea of what your monthly mortgage payment will be, including insurance and property taxes (unless you prefer to pay them separately). This is called a PIT mortgage – meaning you are paying  your principle, interest and taxes in one payment.  Most people chose this option as it is far easier to include your property taxes with your monthly payment, rather than have to budget to directly pay the municipality taxes four times annually.  Be careful though – quite often, although you may be approved for a maximum purchase price, you want to be sure that you have money left over to live at the end of the month.  It’s so important to make sure you aren’t “house poor” – that you still have enough left over to live comfortably, invest, and spend on yourself or your family.  Owning that brand new, shiny home isn’t as much fun as it seems, once the realization hits that there isn’t any money left over to buy your groceries, when all is said and done.  The key is to budget, and to be aware of your cost of living BEFORE you buy that home.

Now that’s over – why buy?  Isn’t renting much easier?  Let’s break it down.

When you buy, you own your OWN home.  You aren’t living in someone’s else’s property.  You can renovate, decorate, entertain in it, as you please. At least, according to municipal by-laws regarding building codes, etc.   Want to paint that living room bright purple? Done – flooring included!  Want to put lime green shutters on the exterior? Go right ahead! Make that place your own, because as long as you make your monthly mortgage payments – that’s what it is!  Sure, your neighbours may question your taste.  But who cares?  That house is yours!

When you buy, you are still paying to live there.  Just like when you rent.  But, instead of your investment-savvy landlord building financial equity – now you are! Maybe you’re paying a bit more, because of property taxes.  But who cares?  You’re a home owner! And seeing that mortgage principal go down each term is a darn good feeling – one day you may be mortgage-free lisinopril price.  No more payments, and an investment worth more than any savings account can ever give you.

Owning your own home means you won’t ever have to worry about an eviction notice.  Because who knows what’s going to happen if the place you are living in goes up for sale, or the owner’s son gets married, or the landlord suddenly finds out that you’ve brought 3 Great Danes into the picture and decides this would be a good time to “renovate” (because we all know that discriminating against pet-owning tenants is no longer allowed in Ontario)?  Either way, you can never fully guarantee that those living quarters will be there for you in the future.

Studies show that children who are raised in homes owned by their parents do better socially, behaviourally, and intellectually.  Wow – that one was a surprise to me too.  But it makes sense.  Here it is:  http://researchnews.osu.edu/archive/chldhome.htm

Hate the thought of yard work? Go condo!  More on that later – but condo living has increasingly become the choice of many busy home-buyers.  You still own the home, but the property is managed by the condominium corporation.  Best of all, you will never have to touch a lawn mower or blow out a driveway again.

I could go on and on.  But this is a blog, not a book.  Summed up – there really are more benefits to home ownership than renting, and many options to choose from depending on your lifestyle.  Need to find out more? Give me a call, and we can chat.  My home office, your home, or the local coffee shop.  I’m comfortable in them all!