Buying your first home is a big decision – one that’s uniquely personal. Maybe you’ve saved up enough money for a home but feel comfortable renting for a little while longer, perhaps you’re frustrated with not having your own space and can’t wait to have a home that you’re able to renovate to your heart’s content.
Both buying and renting have their merits and knowing which path is right for you isn’t always straightforward. To help you get a better idea, we’ll compare the advantages of renting versus the advantages of stepping up to your first home purchase in this blog. Keep reading for more insights.
What Are The Advantages of Buying a Home?
Building Equity
Many people agree that the best reason to buy a home is that it allows you to start building wealth for yourself right away. As you pay off your mortgage, you’re investing in a high-value asset. When the time comes to sell your home in the future, you’ll get that equity back. In contrast, renting means paying off your landlord’s mortgage for them. Once you’ve paid rent, you won’t see any of that money come back to you.
It’s Your Home
Another big motivator for first-time home buyers is customization. As a renter, you’re fairly limited in how you can make the property feel like home. However, as a homeowner, the sky’s often the limit when it comes to customizing or upgrading your home. You can paint walls, remodel, and decorate as you please without needing landlord approval.
Weighing the pros and cons of homeownership? Check out these blogs to learn more about what goes into buying a home.
- Will I Ever Be Able To Afford A Home?
- How Long Should You Plan Ahead Before Buying A Home?
- How To Improve Your Credit Before Buying A Home
What Are The Perks of Renting?
No Major Commitments & Lower Costs
Arguably the biggest advantage of renting is that it’s far less of a financial commitment than buying a home. Instead of making a down payment, which can be hundreds of thousands of dollars, you’ll only need the first and last months’ rent (plus a security deposit) to land a place. Plus, while you’re on a lease, your rent costs will be fixed – unlike mortgage payments which can change when rates fluctuate. This makes it much easier to budget for housing costs as you won’t likely run into any major surprise expenses.
To that end, another one of the biggest benefits of renting is that your landlord is responsible for repairs and maintenance. If the furnace breaks or the roof leaks, it’s not your problem, financially or time-wise.
Pack Up & Go
While you’ll be limited in how you can customize your living space, renting provides flexibility in other ways. For example, renting offers greater freedom for those who aren’t ready to settle in one place for an extended period. In Ontario, the standard lease duration is 12 months. After that, you’ll be renting on a month-by-month basis. This makes it much easier to move if you’re unsure about where you’d like to be in the next few years.
Getting ready to purchase your first home? Explore these blog posts for important advice.
- What is ‘House Hacking’? Get to Know This Increasingly Popular Path to Homeownership
- Should You Get Pre-Approved Before House Hunting?
Is it Your Time to Buy?
Buying a home is a big goal for many Canadians, and it certainly has its perks. However, it’s not something that you should rush into. Homeownership is not just a financial decision; it’s also a lifestyle choice.
There are two questions to ask yourself before buying a home: One, can you afford it? Two, are you ready for the responsibilities of home ownership?
Understanding the Financial Impact
Homeownership is a big financial commitment and understanding your financial strength is important to making a safe investment. When it comes to acquiring a mortgage, lenders typically want to see that you have a steady job and enough income to cover your mortgage payments, property taxes, insurance, and other housing-related costs. If your job is unstable or you’re not sure about future income, continuing to rent may be a safer option for now.
As a buyer, you’re also committing to a certain lifestyle on top of your purchase. Ask yourself if you plan on staying in one place for a decent amount of time. More specifically, buying a home makes sense if you’re planning to stay in the area for at least 5-7 years.
Selling a home too soon after purchasing can result in a financial loss due to closing costs, real estate agent fees, and other selling expenses. If you’re unsure about your long-term plans, renting may offer more flexibility.
Are You Ready for the Responsibilities of Homeownership?
When you own your first home, you’ll have a lot more control over your space compared to renting. However, the trade-off with this freedom is responsibility.
Owning a home means taking on a variety of responsibilities, from routine maintenance (like lawn care and cleaning gutters) to larger issues (such as plumbing repairs or replacing a roof). If you’re not prepared to handle these tasks or the cost of hiring someone to do them, you may not yet be ready to own a home.
Gearing up to buy your first home? Our team of experienced agents can help you achieve your real estate goals. Give us a call at 416-322-8000 or reach us by email at info@bosleyrealestate.com.
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