Should You Rent or Buy Your Home?


What is a home anyway?  Some say it’s where your family is.  For some others, home is where the heart is.  In any case, your home is your safe haven; your castle!  Whatever the case, home is something that you form an emotional attachment to, some people more than others.

 

So how do you protect it, and does it matter whether you rent or own your home? One can find arguments to support either scenario of renting and buying your home. And as individuals, we each have our preferences. Listed below are some of the advantages and disadvantages of each scenario.

 

Advantages of Renting your Home

Advantages of Buying your Home

There is no need for a sizable down payment; and if you do have money for a down payment, investing it wisely may help you get a good return.

You don’t have a Landlord who may kick you out anytime

You can move to a different home with little notice if you do not like it or because of a new job

You are building equity as you pay off your mortgage; this helps you build wealth!

You don’t have to worry about maintenance, taxes and repairs, etc.

You are able to renovate and decorate your home however you wish

 

You could have an income stream if you rent out a spare bedroom, or a basement suite

 

If the housing market goes up, you stand to gain from your home. And the capital gains on your home (principal residence only) is tax free

 

Real property has been shown to not only be a good hedge against inflation, but also to provide good gains especially over the medium to long term

 

 

Disadvantages of Renting your Home

Disadvantages of Buying your Home

You cannot recover the cost of rental paid.

For most people, you are committed to a medium to long term investment.

You cannot control rental increases; there might even be increases when house prices remain stable or even decrease

You cannot count on a quick sale of your home if you need to move away to someplace else; e.g. new job, etc.

You may have to change furniture every time you move; a lot of spaces need specific-sized furniture or even customized ones

You need to pay maintenance and tax on your home as well as fix any problems that may arise.

You do not have the security of knowing that you can stay in the home long term, even if that’s what you want.

If the housing market goes down, you are exposed to a potential loss, if you need to sell.

 

So, you have to decide if renting or buying makes more sense for your situation.  And perhaps you should talk to a Realtor©, who is a real estate expert who can review your options and advise you.

 

Yes!  Home sweet home!  Let’s aim to keep it that way!