Choosing whether to rent or own your home is a personal and financial decision that requires calculated thinking. Here are some key factors to help you determine which option might be best for you.
Location
Your lifestyle will govern where you want to live, but it can also determine how you want to live. If you’re both young professionals who enjoy city life, a high-rise apartment or condo might be the ideal situation for you. Living in the city means you can be near entertainment, shops and good food and you won’t need a vehicle to access it all. You’ll also save time and money on your daily work commute. As a short-term lifestyle, renting can also save you money as you prepare for future living arrangements. Of course, it’s always possible to buy a home in a city centre, but this usually comes at a premium price. Downtown condos and homes can demand higher price tags because of the lifestyle you’ll be buying into.
Cost
Monthly payments are a reality for every couple. Finding out what your monthly income affords you can help you figure out where to settle down. Wendy Chapman, a real estate agent with Century 21 The Professionals Ltd. in Calgary, says the housing market typically increases seven to 10 percent a year. “If you buy a $350,000 house, over your first year, the house has increased by $24,500,” she explains. “But let’s say you are paying $750 per month for rent. After one year, you have spent $9,000 that has done nothing for you.” This translates into $33,500 of potential loss.
Convenience
Renting can be a huge convenience to young couples. Renters aren’t responsible for home repairs or maintenance. If the furnace breaks, somebody else will fix it. If there is a crack in the ceiling, somebody else will spackle it. However, when you’re a homeowner, you’ll be that somebody fixing and spackling. On the flip side, if you hate the tiles in your bathroom, as the owner, you can upgrade to marble.
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Posted by Vitalia on May 16, 2011 at 12:42 p.m.
I think what is forgotten often when it comes to renting versus owning, having done both...is that you can SAVE SAVE SAVE while you rent, so you can actually put down a decent amount of money on your house, avoid CMHC costs, AND after a year statement from your bank on how much you paid off the "PRINCIPLE" you will be sooo disgusted in how much you paid in interest instead. the first few years you barely touch the principle (so whats the diff in paying thousands to the bank or a landlord??? oh yeah, you had to buy a new furnace). Unfortunately in my case, I bought in 2007, so no the house didn't increase by 24,500, it decreased by that amount. I'm still dealing with the ex I bought a place with on what happens to the place b/c there is a financial loss of $100,000 with bank penalties, taxes, lawyer fees, and realtor fees. I'm willing to "walk away".
So...moral of my story at least is: 1. do not buy with the wrong man. haha 2. Save more than 10%, use one persons income to save for the down payment 3. buy what you can afford, not what the bank can give you and think of worst case scenarios.
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