Choosing whether to rent or buy is a common conundrum when you're looking for your first home. There are many differences between the two, so it's important to carefully weigh the pros and cons of each to help you decide which is best for your lifestyle. Read on for a few insights to help you make this important decision.
Renting is a popular choice for many first-time home seekers, for a number of reasons. But whether or not it's the right choice for you is most important. Here are a few things to consider.
Pro: Very Little Commitment
With renting there is often very little financial commitment involved compared to taking on a mortgage. That being said, renters only have to worry about post-dated cheques, leases and damage deposits.
Con: Limited Personalization
A rental property is under the control of the landlord. Which means in most cases you won’t be given the opportunity to change anything. Often, if you want to paint, switch out fixtures or even hang pictures you need to consult your landlord.
Pro: Ready Availability
Sometimes, it's easier to find a rental property in your community of choice rather than having to worry about lot sizes or home models. This does mean that you may have to sacrifice your preferred home style for a convenient neighbourhood, however.
Con: Paying Someone Else
When it comes down to building equity, buying will always trump renting. When you rent, you are helping someone else build their nest when you could be building your own. Not to mention, the landlord can raise the rent at any time.
Renting means your landlord takes care of any maintenance involved with your building. If something stops working, they are generally obligated to come fix it. This is a huge bonus, especially if you're not handy.
Sterling Homes offers multi-family models, duplexes and townhomes, and single family models, laned homes, that are comparable or better than renting. Buying a home is the best way to gain security from your living situation. Unlike renting, buying a home can result in large profits down the road.
Here are a few pros and cons to consider.
Pro: Equity and Tax Benefits
As mentioned above, owning a home results in equity - giving you the chance to financially prosper. Not to mention it's cheaper! For example, the average Edmonton mortgage costs $1,592 per month. Rent of a higher-end, two bedroom apartment can cost upwards of $2,500. That’s a savings of more than $10,000 you can save or put in your pocket!
There are also some financial perks available to first-time home buyers. For instance, the First-Time Home Buyers' Tax Credit (which we discussed in our post Down Payment Basics for First Time Buyers) gives first-time homebuyers money back on their first home purchase.
Con: Costs of being an Owner
There are a few miscellaneous fees that can come with buying a home, such as opening and closing costs, taxes, and insurance. The investment in a new home is worthwhile overall but be prepared to factor in these costs.
Pro: Control your space
You have complete and total control over the design elements of your space. This means, no matter what your personal style, you can customize your home without worry.
Con: Less Mobility
If you are the type of person who moves around a lot, say for work, owning a home is a big commitment. That being said, you may want to explore using it as a rental property. That brings us to our next “pro” point.
Pro: Consider a Roommate
Generate some additional income by renting a room or purchasing a house with a basement suite. This is the perfect way to save some money, and help pay down your mortgage. In some cases, renting a space can cover your mortgage completely. Sterling Homes offers plan options that include basement development and In-law suites making your decision easier to buy instead of rent.
When looking at whether to rent or buy you need to assess your needs closely. Now that you have a better grasp on the benefits of each, you can make an informed choice on which is best suited to your lifestyle.
Go to sterlingedmonton.com and check out what we have to offer!