It’s quite common to get frustrated when renting. After all, you’re paying often expensive rent each month, sometimes even putting work into the property, and while it does cover your accommodation, once you move out you’ve got nothing to show for it. If you own your home however, your monthly mortgage payments are similar to paying rent except they are going directly towards your own home: your own investment. Once you own your home outright, it’s a huge asset, especially in a city with such a high and competitive real estate market.
Many people, if financially able, would choose owning a home as the money they put into accommodation goes directly into the property, their own investment. There are, however, considerations to take into account whether renting or owning. Depending on your lifestyle, owning may not be right for you even if you do have the cash for a down payment.
In this article, we’ll take a quick look at some of the pros and cons of owning versus renting.
Advantages to owning a home include:
- Owning a home gives you a sense of stability and of ownership. Many people grow up imagining they will one day own property. If you want to settle and start a family, owning a home can give you the stability to do so.
- Buying a house is likely the largest purchase you will ever make. While it takes time to pay off a mortgage, a home is a good investment, one which you can also keep in the family should you choose.
- If you own, you have more freedom when it comes to renovations and home improvements. No more dealing with potentially difficult landlords.
- There are certain tax deductions you can make as a homeowner, such as deductions on property tax and on interest paid.
Potential disadvantages include:
- You will have to spend more money. Even though your mortgage payments may be the same or less than paying rent, there are still considerable expenses, especially in the first few years of home ownership. This can include such expenses as utilities, insurance, and property tax. Make sure you fully understand the expenses before you buy. A mortgage broker can help advise you in that regard.
- Having a mortgage and owning a home is a big commitment, both financially and timewise. If you plan on moving around or travelling a lot, homeownership may not be right for you.
Advantages of renting property include:
- Renting can give you more flexibility. Usually after a year long lease, leases change to month-to-month which can give you the flexibility you need if you are unsure of your future living situation.
- As a renter, you will not have to pay for many repairs as those fall under the responsibility of the landlord.
- Rent is often cheaper than a mortgage, and you don’t pay property tax.
While disadvantages include:
- You must obey the landlord’s rules, which may, for instance, forbid pets.
- There are limitations on the appearance of the home and home decor.
- Zero return on your investment.
If you are considering making the move from renting to owning, consult a mortgage broker today. A mortgage broker can help you understand the market and assess your financial situation to help you determine if owning is right for you. Contact one of our mortgage professionals today to set up a consultation!