Buy Or Rent?
Is it better to rent or buy your home? Official data shows that two-thirds of Canadians own their own homes, so for the most part, Canadians are in favour of home-buying. Often viewed as a safe strategy, it is generally also seen as an effective vehicle for retirement savings. The ratio between rents and homes prices is one good gauge of housing affordability.
The mortgage rate that a homebuyer gets in order to finance the home is often the biggest factor, after the overall price.
Checking the price-to-rent ratio (or P/R ratio) is one way to tell whether it's better to rent or buy. This number gives you a rough idea whether homes in your area are fairly priced. Figuring a P/R ratio isn't tough. 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.
You benefit in many ways when you sign a lease on a place to live. 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. Any issues with the property's plumbing, fixtures, or lighting are normally handled by your landlord or building supervisor. Depending on where you rent, many utilities and amenities may be covered for you in the initial rent payment, cutting out extra bills. Lawn care may be taken care of.
Buying a home, of course, gives an owner 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.
You may have an easier time come tax season. If your home is historic, there may be tax breaks for restoration.
We haven't decided yet about putting in a bid for where we live yet. However, when we do decide, I think we will understand the pros and cons of both avenues.
Discussions of homeownership should be grounded in reality. Buying a home isn't some magical financial solution. You can waste just as much as if you were renting, and you lose a lot of the flexibility and freedom you might otherwise enjoy. Buy a home if you want to. But don't let anyone persuade you that you're throwing your money away by renting.
The mortgage rate that a homebuyer gets in order to finance the home is often the biggest factor, after the overall price.
Checking the price-to-rent ratio (or P/R ratio) is one way to tell whether it's better to rent or buy. This number gives you a rough idea whether homes in your area are fairly priced. Figuring a P/R ratio isn't tough. 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.
You benefit in many ways when you sign a lease on a place to live. 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. Any issues with the property's plumbing, fixtures, or lighting are normally handled by your landlord or building supervisor. Depending on where you rent, many utilities and amenities may be covered for you in the initial rent payment, cutting out extra bills. Lawn care may be taken care of.
Buying a home, of course, gives an owner 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.
You may have an easier time come tax season. If your home is historic, there may be tax breaks for restoration.
We haven't decided yet about putting in a bid for where we live yet. However, when we do decide, I think we will understand the pros and cons of both avenues.
Discussions of homeownership should be grounded in reality. Buying a home isn't some magical financial solution. You can waste just as much as if you were renting, and you lose a lot of the flexibility and freedom you might otherwise enjoy. Buy a home if you want to. But don't let anyone persuade you that you're throwing your money away by renting.
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