Have you ever heard the old real estate saying, “Why rent when you can buy?” If it’s so often said, you’re probably beginning to wonder if it’s true. They say it all the time, it just has to be true, right? If you should rent or buy depends on a variety of factors, but buying a home is generally considered a positive investment for your future. To help you decide for yourself here are 4 things you’ll want to think about before making the leap in either direction.
What’s your 5-year plan
If you’re on the fence about either buying or renting, you should consider what your 5-year plan is. If you’re confident you will keep your job and are planning on living in the same city you’re currently in, buying will help you settle down and finally start thinking about those long-term goals you want to achieve in your lifetime. You’ll be in for a crazy ride if you buy a home without fully considering if your current job is a position you want to stay at, or if you get bored of places quickly and you’re stuck with a home worth hundreds of thousands of dollars and a fixed address.
The Down Payment
When you have enough for a down payment, it’s important to start searching for the perfect home for many reasons. In the long run, your mortgage payments will start going towards the principal loan repayment more-so than the interest fees, and in-turn builds equity instead of paying into someone else’s investment fund. This will help you climb the property ladder, or give you a large windfall if you eventually downsize.
Consider the extras
There are extra costs associated with home ownership that doesn’t apply to renters, but it’s all about the perceived benefit and what you value as an individual. There are repairs, maintenance fees if you want to own a condo, property taxes and utility bills but these may not outweigh how much you’ll enjoy owning your own home. Most repairs or renovations can be done at your leisure, contributing to the overall atmosphere you want to create along with the benefit of an increase in property value, instead of waiting for your landlord to correct whatever needs fixing while seeing only a depletion of your assets.
How important is home ownership to you?
The last thing to consider is how important home ownership is to you. It may be important to your personal goals if you’ve always dreamed of having that picturesque home for your family to grow into, or you may be motivated to climb the property ladder becoming a landlord with financial motivation for that ROE you crave. You can have it as a rental property for extra income, you won’t be limited to solely painting your walls, and can really make it your own when renovating. Another bonus is that owning a home can be your instep for a career change in house flipping if you find you enjoy doing so. With lofty goals as mentioned, they will be difficult to achieve in the rental scene.
From life-stability to reaching your goals, owning a home creates benefits unattainable to a renter. And, although owning a home does come with its challenges, with the right preparation and mindset, it is a platform for long-term success. If you are thinking of dipping into the housing market and are interested in running the numbers to see what kind of mortgage you could qualify for, feel free to give me a call at 705-315-0516. I will work alongside you each step of the way, from mortgage-approval to signing the last dotted line to help you gain a better understanding of the benefits and challenges of achieving your goal of homeownership.