Deciding whether you should rent or buy a property is not a new debate. However, as housing market conditions change, so too does public opinion. While buying a home is generally viewed as a milestone in one’s life, doing so in hotter markets can be financially challenging. The choice between buying or renting purely depends on one’s circumstances.
Zoocasa has come up with a list of things you should consider if you are still uncertain on whether you should rent or buy your home.
Saving for the Future
One of the main reasons people prefer to own their home over renting one is that money used for rent payments could instead go toward a mortgage, which builds equity. This grows over time and can especially improve the homeowner’s financial picture should values rise in a hot market, such as houses for sale in Toronto or Toronto condos.
Equity can be quite useful for when you decide to sell your home, but it can also offer you leverage if you are looking to take out a loan for big ticket items such as renovations or paying for your child’s education.
However, buying a home requires saving up a minimum down payment, and amassing an even larger nest egg will help lower your total mortgage costs. This takes time, though, and can put a monopoly on disposable income, while renters may find they have more money for things like travel and investment. Because of this, purchasing a home may require lifestyle sacrifices, such as tighter budgeting.
Another consideration to make is how long you plan to stay in your city or town, and, more specifically, the space you are currently living in.
While renting may be more ideal for shorter-term living arrangements, if you are planning to stay somewhere for a while, it may be a good idea to buy. Buying offers homeowners a degree of freedom and housing stability that they may not otherwise have with a landlord. For example, they are free to make any renovations or changes they like to personalize their space, don’t have to worry about rising rent costs, or the threat of eviction.
However, owning a home offers less flexibility and freedom, which can be a challenge for those who need to relocate quickly or undertake another lifestyle change.
The cost of buying a home goes beyond the initial real estate transaction; it is also important to take repairs into consideration when creating your budget, as you’ll be on the hook for any fixes the home may require.
While some repairs are cheap and relatively easy to do yourself, others can be costly and may require professional assistance. If you do not have enough wiggle room in your budget, these more costly repairs may set you back financially.
Renters do not have the same additional costs, as their landlords are responsible financially for repairs. However, renters do have to be mindful of any damages made to the space, like marks on the paint or dents on the floor, as they will be responsible for fixing these issues before move-out day or could risk losing their deposit, depending on their province.
Deciding whether to rent or buy should be your decision. It is important not to feel pressured either way, as the only person who knows fits best with your lifestyle is you. Regardless of your choice, it’s important to weigh the pros and cons and determine how it will affect your budget and lifestyle.
Zoocasa is a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. View real estate listings at zoocasa.com or download our free iOS app.