One of the questions that is likely to come up when you are looking for a new place to live, is whether you should buy or rent. For some, it’s either one or the other with no room for debate, but if you aren’t sure the choice can be a tough one.
Both buying and renting have pros and cons, but in the end there is really nothing like having a home of your own. A lot of the time, people who are in a position to buy are reluctant because of their beliefs about mortgages and the commitment attached to having a mortgage.
Naturally, we feel differently about this subject, so we made a list featuring 5 benefits of buying a home of your own instead of renting.
1) Building Equity
The thing about renting is, in many cases you’re still paying off a mortgage. It just belongs to someone else. Basically, you’re helping to create equity for someone else, instead of yourself. You have to live somewhere and in most cases, you have to pay to live there. Why not pay to live somewhere that is creating a very valuable asset at the same time? Homes have averaged a 10% return year over year in Toronto over the last 10yrs. So on average, if you bought a house for $500,000 in 2004 that same house would be worth at least $1,000,000 today in Toronto. That is an amazing return on investment.
2) Your Inner Designer
If you are a renter, you know how difficult it can be to make even minor changes to the décor of your rental property. And if you are able to paint, switch light fixtures, etc; you usually have to change everything back before you move out.
When you buy a home, you can unleash your inner designer / DIY person and change whatever you want. You can change the entire theme of the home, re-route plumbing, take down walls or change the flooring. Buying means all those hours watching home improvement shows won’t go to waste!
3) Family Stability
When you buy a home and make it uniquely your own, you are setting the stage for decades of childhood memories, grandkids and important family get-togethers. The sense of nostalgia that comes with owning a home and watching your family grow with it is immeasurable. You’ll also create a source of financial security later in life when the mortgage is gone and you have this valuable asset.
4) Payment Stability
Most lease agreements last for one to two years, then it’s time to do it over again, possibly with a rent increase. Many landlords increase the rent as much as the law allows, every single year. And while mortgage rates aren’t always rock steady, you can opt for 5-year fixed terms where you’ll know exactly how much you have to pay for that period of time, making it a more stable option.
5) Sense of Community
When you buy a home instead of renting, there is often a higher likelihood that you’ll take an active interest in the community. This includes things like making your property look neat and well-maintained, getting to know your neighbours on a deeper level and working to keep the neighbourhood safe. That’s not to say a renter doesn’t want a safe community. But when you own your home, it also feels like the community belongs to you and your fellow homeowners, taking community pride to another level.
When you consider these benefits and factor in low interest rates, buying instead of renting just makes sense.
Call or email a Mortgage Professional at Mortgages.ca to learn even more.
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