- October 30, 2020
- Category: Home, Tips & Advice
Perhaps you’ve contemplated buying a home, but were scared by the daunting down payment you think you’ll have to put down or the high-interest rates you’ll have to pay for the next 25 years.
We’re living in a unique time where real estate prices are on the rise and interest rates continue to fall. Why continue to throw your money away by renting when you can own a property of your own?
Well, Halifax’s hot real estate market has made long-term renting very common. Also, owning a property isn’t always the smart choice, you have to look beyond affordability and look at your lifestyle, financial readiness, and long-term plans. Let’s have a look at some of the pros and cons of renting vs. buying property.
Financial Control
When you buy a property, you’re building equity. Each month you’re one step closer to owning an asset that generally increases in value. While your future is more predictable when you buy a property, it usually means less flexibility. You can’t pack up your things and move across the world whenever you want.
Stress
Taking on a mortgage can be stressful, especially if you’re unsure if you can secure financing. Use this tool to find out if the bank will secure your mortgage. If not, you may need to look at decreasing your budget or saving more money for a down payment.
Risk
Every investment comes with an element of risk. When you rent, as long as you have tenants insurance you don’t need to worry about the market crashing or wear and tear. Your biggest risks may be whether you like your landlord and neighbors, rent increases, and reno evictions.
Privacy
When you buy a property, you become “management.” There are no more interactions with your landlord. You’re fully in charge of your property, meaning things get done on your schedule. While landlords must follow regulations when interacting with their tenants, some don’t, which is not an enjoyable process.
You should consider renting if:
- You have lots of debt (student loans and/or credit cards) you need to pay off
- You don’t have a stable income
- You don’t have money saved for a down payment
- You’re not emotionally ready to settle down and commit for at least five years
You should consider buying if:
- You have a steady and secure income
- You’re emotionally ready to settle down and commit
- You have money saved for a down payment and closing costs
- You have a financial plan and you’re confident you can afford your mortgage without sacrificing other important aspects of your lifestyle.