03 Apr Should I Buy a Home Instead of Renting?
If you’ve ever been looking for a new place to live, then you’ve no doubt had this question cross your mind: To rent or to own? It’s a loaded question and the opinions you get will be pretty divided.
The only way to really know what to do is to look at the pros and cons objectively. Let’s examine the advantages of both options, as well as the challenges you may face.
Round 1: Freedom
The question you need to ask yourself is how much freedom you want. When you’re renting, you’re at the mercy of your landlord. Depending on the location and type of dwelling, you may face restrictions. However, if you wanted to live somewhere new, moving out isn’t a complicated process – it just means waiting until the rental agreement has expired.
Naturally, buying puts you at the opposite end of the spectrum. It’s your property and you can generally do as you please. You won’t have to worry about someone constantly watching over you and you can make the space as unique as you’d like. Of course, this means that you’ll want to consider the value you are adding to the home when making any adjustments.
Round 2: Cost
If you’re made out of money, you really don’t need to worry about renting or buying. For most of us, however, it’s a legitimate concern. Renting can seem attractive because of the simple nature of forking over rent, whereas buying a home will be a bigger strain on your wallet and the process is much more complicated.
When comparing buying and renting, a great tool to employ is the price-to-rent ratio. It weighs the cost of purchasing a home with the annual cost of renting one.
To figure this out simply take the sale price of your home and divide it by the annual cost of renting. The resulting number is your price-rent ratio. A P/R ratio above 20 usually means that owning that house will cost you more than renting it monthly.
Round 3: Investment
While you may feel like you’re saving by renting, you aren’t making an investment. This is where buying has an edge. Purchasing a home isn’t going to make you rich overnight, but since you own the property, it’s yours to sell in the future. Any additions you make can raise the value, and as the market and your area change with time, so to does the resale value of your home.
Renting doesn’t offer the same benefits and the best you can hope for is rent staying the same. This is the ideal scenario as many people who rent can attest to steadily increasing rates.
In the end, it’s all about what you need. Buying may seem more costly but it’s a decision that can give you more long term freedom and stability, while renting suits those looking for a quick (and potentially temporary) accommodation.
Interested in Buying the Right Home for Needs?
If you’ve decided that buying a home is the right choice for you, the next step is finding a home that’s the right fit for you. Buying a home is one of the most important investments you’ll ever make in your life, which will impact how comfortable your family is both in the house and financially in the future.
At Previn Court Homes, we know this decision is an important one, and we strive to create beautiful homes that will provide long term value. Since our inception over 40 years ago, we have constructed in excess of 1500 homes in Canada, and in the process made the dreams of 1500 families come true. Take a tour of our incredible models, or contact us today for more to let us know your needs in terms of bathrooms, bedrooms and budget.