Should you rent your home, or buy it? Official data shows that two-thirds of Canadians own their own homes, so for the most part, Canadians are in favour of home-buying. It is usually considered a safe investment and a good retirement savings strategy. A solid indicator of housing affordability is the ratio between home prices and rents.
The biggest factor, apart from the overall price, is often the mortgage rate a homebuyer receives in order to finance it.
One way to tell whether it's better to rent or buy is by checking the price-to-rent ratio (or P/R ratio). This number gives you a rough idea whether homes in your area are fairly priced. It isn't tough to figure a P/R ratio. Simply find one house, condo or apartment that is for sale, and another similar one that is for rent. Then, divide the sale price of the one place by the annual rent for the other. The resulting number is the P/R ratio.
By signing a lease on your residence, you reap many benefits. If you are living in the home temporarily, there is no worry about selling the home at a later date and waiting for somebody to buy before you can buy another home. Also, your landlord or building supervisor normally handles any problems with the property such as plumbing, fixtures, and lighting. You might to choose to rent somewhere that the initial rent payment includes utilities and amenities, so you avoid extra bill payments. The yard work might be done for you.
Naturally, home ownership offers many advantages:
You make a payment on the house and work closer to owning something, rather than paying rent and investing in a property you may eventually leave.
When you own, you do not have any restrictions. You are free to paint, renovate, and put up paintings without having to put it all back later.
It may be easier for you at tax time. If your home is historic, there may be tax breaks for restoration.
We have yet to decide on a bid for where our home is. I feel we'll be well informed of the advantages of doing either, when we do decide.
It's important to discuss home ownership with a solid knowledge base. A home purchase won't solve your financial challenges. Money can go just as fast as if you were renting, and you might otherwise enjoy a lot of flexibility and freedom. If purchasing a home is something you want, do it. But don't listen to people who tell you that your money is wasted on rent.
The biggest factor, apart from the overall price, is often the mortgage rate a homebuyer receives in order to finance it.
One way to tell whether it's better to rent or buy is by checking the price-to-rent ratio (or P/R ratio). This number gives you a rough idea whether homes in your area are fairly priced. It isn't tough to figure a P/R ratio. Simply find one house, condo or apartment that is for sale, and another similar one that is for rent. Then, divide the sale price of the one place by the annual rent for the other. The resulting number is the P/R ratio.
By signing a lease on your residence, you reap many benefits. If you are living in the home temporarily, there is no worry about selling the home at a later date and waiting for somebody to buy before you can buy another home. Also, your landlord or building supervisor normally handles any problems with the property such as plumbing, fixtures, and lighting. You might to choose to rent somewhere that the initial rent payment includes utilities and amenities, so you avoid extra bill payments. The yard work might be done for you.
Naturally, home ownership offers many advantages:
You make a payment on the house and work closer to owning something, rather than paying rent and investing in a property you may eventually leave.
When you own, you do not have any restrictions. You are free to paint, renovate, and put up paintings without having to put it all back later.
It may be easier for you at tax time. If your home is historic, there may be tax breaks for restoration.
We have yet to decide on a bid for where our home is. I feel we'll be well informed of the advantages of doing either, when we do decide.
It's important to discuss home ownership with a solid knowledge base. A home purchase won't solve your financial challenges. Money can go just as fast as if you were renting, and you might otherwise enjoy a lot of flexibility and freedom. If purchasing a home is something you want, do it. But don't listen to people who tell you that your money is wasted on rent.
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