When you are looking for a new place to live, one of the questions that is bound to come up is whether you should buy or rent. For some, it’s either one or the other with no room for debate, but if you aren’t sure the choice can be a tough one.
Both buying and renting have many pros and cons, but in the end there is really nothing like having a home of your own. Purchasing a home is a big step. It’s not purely a financial decision; it is an emotional one as well that can affect everyone in your family. It makes sense to feel nervous about taking such a big step. I always remind my staff that our customers have trusted us with probably the biggest purchase they will ever make in their life, and we have to deliver.
So if you think you’re ready, here’s a list featuring 5 benefits of buying a home of your own instead of renting.
1) Building Equity for You - The thing about renting is, in many cases you’re still paying off a mortgage. It just belongs to someone else. Basically, you’re helping to create equity for someone else, instead of yourself. You have to live somewhere and in most cases, you have to pay to live there. Why not pay to live somewhere that creates a valuable asset for you at the same time? Homes have averaged a 10% return year over year in Toronto over the last 10yrs. So on average, if you bought a house for $500,000 in 2004 that same house would be worth at least $1,000,000 today in Toronto. That is an amazing return on investment.
2) Your Inner Designer - If you are a renter, you know how difficult it can be to make any even minor changes to the décor of your rental property. And if you are able to paint or switch light fixtures you usually have to change everything back before you move out. When you buy a home, you can unleash your inner designer / DIY person and change whatever you want. You can put those hours of watching home improvements to good use - change the entire theme of the home, re-route plumbing, take down walls or change the flooring. It’s your choice.
3) Family Stability - When you buy a home and make it uniquely your own, you are setting the stage for decades of childhood memories, grandkids and important family get-togethers. The sense of nostalgia that comes with owning a home and watching your family grow with it is immeasurable. You’ll also create a source of financial security later in life when the mortgage is gone and you have this valuable asset.
4) Payment Stability - Most lease agreements last for one to two years, then it’s time to do it over again, possibly with a rent increase that depending on the landlord, could be as high as the law allows. And while mortgage rates aren’t always rock steady, you can opt for 5-year fixed terms where you’ll know exactly how much you have to pay for that period of time, making it a more stable option.
5) Sense of Community - When you buy a home instead of renting, there is often a higher likelihood that you’ll take an active interest in the community. This includes ensuring your property looks neat and well-maintained, getting to know your neighbours on a deeper level and working to keep the neighbourhood safe. That’s not to say a renter doesn’t want a safe community. But when you own your home, it also feels like the community belongs to you and your fellow homeowners, taking community pride to another level.
Sue Wastell is the president of the London Home Builders' Association and Owner of Wastell Homes in London.