Buying a home is one of the biggest purchases you will make in your life. It is one that should not be entered into hastily, and it is often not the right decision given your finances, lifestyle or your employment.
As Canadian interest rates increase, there is even more reason to rethink the pros and cons of purchasing versus renting a home. Consider:
When you buy a home, there are additional costs on the transfer and sale not to mention the inspection fees, yearly taxes and monthly mortgage cost. When you are renting and the roof starts leaking, for example, it is neither your problem nor cost. Call the landlord.
2. Lifestyle Flexibility
If you know your work may be changing, a promotion is around the corner or you just want the flexibility to move when you want – having a permanent investment like a house can put a stop to your plans.
You cannot always sell a house at the price you want, when you need to. You are not in control. When you rent, you just need to give your notice and you can leave on your terms.
You may not be able to buy a home in the area you truly want, but when you are renting you can live in an area at a fraction of the cost of homeowners. The mortgage, upkeep and other fees are not your concern – that is for the home or building owner.
If the economy suffers or the housing market bottoms out, the value of the home you are renting is none of your concern. For the homeowner, their rental property may be their retirement nest egg. You will not be losing any valuable sleep over forces beyond your control.
5. Ability to Save
All those extra, and surprise, costs of not being a homeowner can easily be used to help you build your savings and retirement fund portfolio. It is risky to have most of your net worth tied up in one investment. Diversification is key to fund management.
There are advantages and disadvantages to buying a house. Given the current economic climate, be sure you know why you want to buy a house. Renting has many advantages worth exploring and given the changing face of work, family and leisure time, a house is not always in your favour. It all depends on you.