For many people in Ontario, the choice between buying a home or renting is one of the biggest financial decisions they’ll ever make. Both options ensure you have a place to live, but the costs between the two couldn’t be more varied. Because there are so many components that go into renting and home ownership, it can be hard to decide which is a better deal. Read on for some facts about buying and renting so you can make an informed decision.
How Long Do You Plan to Stay?
When deciding whether to buy or rent, the first thing you should ask is how long you plan to stay. If you plan to stay a relatively short time, renting is the way to go. You probably won’t build equity in your new home for several years, making it difficult to re-sell for a profit. It can also be difficult to sell the home, and when the purchase does go through, you will owe commission on the sale.
Renting, on the other hand, is good for those who don’t plan to be in one area for very long. Moving at the end of a lease is simple, and you don’t have to wait to build equity in a property before leaving. When you do move, there are no commissions to be paid, either.
What are the Current Mortgage Rates?
Another thing to look at are the current mortgage rates. Low rates make buying more attractive as the cost of borrowing money is lower. Higher rates mean greater expenses for homeowners, making buying less favorable. You can get a no-obligation quote or even a pre-approval from the bank to see what type of deal would be available to you. Look at all of the costs and fees associated with buying, factoring in money for utilities like water and electricity.
Sometimes, buying a home is a good move for your taxes. Certain components of your monthly payments may be tax deductible, lowering your overall tax burden and allowing you to keep more of your money. An accountant can help you see how buying versus renting would affect your tax situation.
On a more practical note, buying has the advantage of allowing you to customize your home any way you please. If you want to paint the walls, change light fixtures or even do a major remodel, you can do those things when you buy the house. Renters may be very limited as to what they can change in the apartments they are living in.
One thing renters have over buyers is that renters never have to worry about appliances breaking or repairs that need to be made. The repairs are the responsibility of the homeowner, making it easier to budget for monthly living costs.
Whether you plan to rent or buy, a qualified Ontario real estate agent can help you find the home of your dreams.