To Rent or Own? That Is The Question At Hand
Taking the leap from being a renter to an owner is a monumental one in a persons life. Whatever way you slice it, it’s a big step. It’s not one to enter into lightly, it’s important to be ready for the commitment involved. Let’s take some time and analyze the differences between being a renter and an owner and see if it’s right for you.
Renters will generally agree to a fixed term lease at the start of a tenancy, generally for a year. After that first year most tenancies will convert into a periodic month to month tenancy agreement between you and your landlord. Your agreement might have some specific restrictions in it, maybe your landlord doesn’t allow pets or any alterations to the home/unit. You submit your rent every month, and your landlord is allowed to raise your rent once per year within the guidelines provided by the Government of British Columbia. Heat and water are usually included, but cable TV and electricity are usually excluded. For the most part renting is pretty carefree and without responsibilities, outside of making sure your rent is paid on time.
I’m a pretty upfront real estate agent, so I’m not going to suger coat it – buying a home is more complicated and you will have more responsibilities to deal with. The benefits of this added responsibility are numerous though, both in terms of your personal finance and your every day life. First thing to consider is do you have enough money for a down payment and are you currently able to qualify for a mortgage. Make sure to work with a diligent real estate professional who can guide you through the search process as well as a mortgage lender that can give you a great rate and flexible financing if necessary.
So what are your responsibilities as a property owner? None of the utilities are included in your mortgage payments, and you are also responsible for any maintenance as well as property taxes to your municipality. I’ve seen it on my competitors websites and on Youtube videos, claims that you can own a condo or home in Vancouver for the same cost as renting are complete fabrications. It’s just reality that owning is more expensive than renting, anyone who tells you otherwise shouldn’t be trusted.
But the long term gain far outweighs the short term pain. You are building equity, which is a powerful resource to have in your back pocket. One day you will eventually be mortgage free and won’t have worry about that monthly expense after it’s completed in 25 years or less. Not only do you have that to look forward to, but you are also buying into an asset that will appreciate over time. If you buy a condo for $400,000 today and it increases in value a conservative 2% per year, that condo could be worth $695,000 at this rate of inflation when your mortgage is finished. Not a bad thing to be building towards, agreed?
There are also other advantages to owning a home and building equity. Your bank and other lenders will see you as less of a risk because you have equity in real estate in case of emergency. If you work from home you can deduct your mortgage payment from your tax return. You can have that dog you’ve always wanted, or paint your walls whatever colour you’d like. If you like most people you struggle to save money, well now you’ve got a forced saving plan. It’s a liberating and rewarding experience, and provides great satisfaction knowing that you are building towards financial security.
Give me a call on 604.773.2948 if you’d like to figure out whether owning or renting is best for your personal financial situation. Even if you aren’t ready I can set you up on an e-mail notification system to show you real estate listings that you think might fit your criteria in the future. If you are in the market to buy, Vancouver is one of the best places in the world to lay down roots. Let’s chat and get your started on your path to your dream home, I’d be happy to work towards this goal on your behalf.