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Is It Better To Rent or Own a House?

Is It Better To Rent or Own a House?

Family thinking about buying or rent a house with their mortgage broker

Family thinking about buying or rent a house with their mortgage broker

There are a lot of considerations when moving into a new home.  For first-time home buyers, or homeowners looking to relocate, one question that is always a factor to think about is, “Should I rent or should I own my own house?”  There are always pros and cons for both, and an experienced and professional mortgage broker like myself can help you decide on what the best option is for you and your family.

What does it cost to own your own home?

The monetary deposit known as a downpayment made upfront when buying your own house can be very daunting. Beyond the downpayment you need to think about the legal fees, negotiating your mortgage rate, the cost of home insurance, land transfer tax, and more which relate to your purchase, then you have monthly costs on top of that. Your monthly costs when you own a home includes your mortgage payment, your heat, electricity, your phone bill, water bill, etc. which all tend to fluctuate month to month. When you rent a house, you know or basically have a rough estimate on how much you would be paying each month. There would be very few hidden or unexpected costs because the landlord is typically responsible for all home improvements, renovations, or unexpected damages to your rental. When owning your own house, you are responsible for dealing with and paying for any and all mishaps such as a broken faucet, flooding in your basement, or the AC breaking down in the middle of the summer. These examples can be costly to get someone to fix, whereas when you rent, your landlord is in charge of making the executive decisions on how to fix and manage their investment and cover the costs that go along with owning that home. However, they can also decide to increase your rent when your lease is up for renewal, and in today’s rental market, rental rates might just be more than what you can afford. With owning your own home, you have more of an investment to make upfront but with a fixed mortgage rate, you know your mortgage payments won’t change for the duration of your mortgage terms.

What is the average cost comparison in 2021?

The average cost of a home in Barrie in 2021 is approximately $752,568, and the average rental of a three-bedroom apartment in Barrie is approximately $2350.  There are also different insurances needed if you rent or buy your house that you must factor in as well.  Another reason why it is best to work with an experienced mortgage broker is to create a budget of upfront, continuing, and future costs before deciding where to buy or rent your home.

An important question to ask yourself is how much do you value your privacy?

When owning your own house, you can make a little oasis with the layout of your home. You are the one that is in control of how you want everything done, what renovations you might want to do, and when they will happen.  When renting a house, landlords are entitled to make rules about renovations and can put restrictions on what you can or cannot do, how many people are allowed to live there, etc.  A landlord could also potentially show up at any time to see how the house is holding up and see if anything has been damaged that needs to be replaced. They are supposed to give at least 24 hours of notice in advance but, we all know that on the occasion that might not always happen. When you own your own home, you have much more control over who comes and goes from your property and when.

What are your long-term plans?

Do you plan on moving in the future? Are you moving into a new area for work with a new role or company which you may or may not love? If you rent, you can give your required notice and move to your next house when the time is right. That’s a little tricky when you own your own house. You must go through the process of putting your home up for sale on the market, staging your house, storing all your belongings, and it could be a large headache and gamble to find the perfect family to call your old house home. Not to mention that if you break your mortgage before your term is up, you could end up paying penalty fees.

When renting a house, you don’t have a say in living there forever. Your landlord may choose to sell the house, which means that you have to pack up everything and relocate if they sell to a family that plans to live in the house themselves. That could be a big stress factor for your family, especially if that home is very special to you. In the end, you don’t have the authority to be able to make that decision to stay unless you offer to buy the home for the price it’s being listed at if the owner is willing to entertain selling it to you.

Owning your own home is an investment in the future. 

Housing prices are continuing to soar. The value of your house may have gone up due to your home improvements, the location, the real estate market, etc.  If you think about it, when you own a house you’re investing your hard-earned dollars into a type of savings account that will increase in value over time making you money in the future. Whereas when you rent a house, your money goes straight to the landlord and you don’t gain any profit in the long run. But, you do have a cozy place to live.

Why should you work with a professional mortgage broker?

At the end of the day, it all comes down to the individual if renting or buying a home is the best option.  An experienced financial advisor and professional mortgage broker like myself, Darren Robinson, can help you decide which route you should take when it comes to your current or future home. I pride myself on simplifying the mortgage process while working to save you time, money, and effort in your real estate endeavours. With 13 years of experience in the mortgage industry along with my additional background as a financial advisor, I can provide feedback to you on how you can improve your financial goals and your wealth long-term at the same time. There is more to buying a home than house hunting and securing a low mortgage rate, if you’re ready to examine the details to decide whether now is the right time to jump into homeownership give me a call at 705-315-0516 or click here to book a virtual meeting with me online to get started.

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