To rent or to buy, that is the question!
For any people, owning their own home is a life goal. But for others, renting is a more appealing choice because it doesn’t require such a long-term investment.
So, what’s the best option?
In truth, the answer comes down to your unique life situation. Why? Because factors like where you live, your lifestyle, your financial state, and your future plans all play an important part in whether buying a home makes sense for you.
Let’s explore the pros and cons of renting versus buying a home.
For years, renting a home was considered a temporary option until you were financially ready to purchase a home. But with real estate listing prices on the rise, more people are opting to be lifelong renters.
Most often, renting is the more affordable option. Although rental prices are increasing in areas where the housing market is competitive, renting remains an accessible choice for many people. One benefit is that it is easier to save for first and last month’s rent compared to a down payment for a home. Renters also find it easier to budget for monthly expenses because maintenance is the primary responsibility of the landlord or property manager.
There’s also the flexibility of being able to move if your life changes. You have the freedom to pack up if you’re making a career transition, for example. Purchasing a home doesn’t offer the same flexibility as you’ll be penalized for breaking your mortgage.
However, a downside of renting is that you are often restricted from making changes to the place you call home. Any renovations or improvements to your home are decided by your landlord. Even when renovations are made, the landlord has the final say on the style and outcome.
Another disadvantage is that your living situation can depend on your landlord’s situation. If your landlord decides to sell the property, you may find yourself with the unexpected challenge of having to find a new place to live.
If you are at a stage of your life where you want to settle down in one place for at least 5 years, buying a home can be a smart investment. Owning a home helps you build equity, or wealth. This equity grows as you pay off your mortgage and may also increase depending on the real estate trends in your area and how they impact the value of your home.
Owning your home enables you to make the changes you want without having to get approval from a landlord about the scope of the renovation or the budget. You can also turn your home into an income property and become a landlord yourself.
While purchasing can be an attractive option, it does have its disadvantages too. As a homeowner, you’ll be on the hook for unexpected repairs and maintenance costs. This, along with the other costs associated with owning a home such as insurance, mortgage interest, and property taxes can mean there is less available for other investments such as retirement savings or disposable income. However, the strict financial commitments enable you to stick to a long-term financial plan to build wealth.
Ultimately, it’s a big decision to make. We recommend researching rent prices in your area and comparing them to the cost of homes. Then consider whether you’re ready to commit to purchasing a home based on your personal and financial situation. By taking the time to weigh your options, you’ll arrive at a decision you can feel confident about.
And when you’ve made your decision to buy or rent a home, our Niagara real estate experts would love to help you. Discover why it’s worth it to work with our McGarr Realty REALTORS® when buying or selling a property in Niagara!
Call our office at 905-687-9229 in St. Catharines, or 905-468-9229 in Niagara-on-the-Lake. Or send us a message on our contact page, HERE.