The choice to buy or rent is a big decision that affects your financial situation, lifestyle, and personal goals. Whatever option you choose depends greatly on your individual lifestyle and financial situation. Owning a home isn’t always better than renting, and renting is not always as easy as it seems. Here are some key takeaways:
- Home owners are responsible for paying costs upfront for whatever may be wrong with the property (furnace replacement, dishwasher broke, sink isn’t working, etc.)
- Home owners can benefit from tax deductions and equity
- Renting has predictable monthly expenses
- Renting doesn’t mean you are tossing away cash every month, and homeowning doesn’t always help you build wealth
- Both options are greatly determined by everyone’s individual situation and lifestyle
Renting
Renting is predictable as you know your lease amount and monthly expense, your landlord may add other costs like utilities, parking, etc. The landlord is able to increase the rent by a legal allowable amount each year.
Renting means you are able to leave whenever your lease ends. Although, the landlord can also make you move more suddenly if they decide they want to do extreme renovations, or bump up the rent to something you cannot afford (however, the yearly increases usually aren’t that significant).
Renting in Ottawa has increase dramatically over the past two years, especially during the Spring and Summer months. This has increased the average price for rentals. The supply is simply not enough for the demand and people are struggling to find affordable living. On the other hand, prices are at an all-time high for housing and it continues to rise month over month, which means landlords mortgage payments are high as well.
Owning
First time home buyers get a sense of pride and stability. It is an excellent way to build wealth in the long run. Changing your mind about where to live is not cheap, you may not be able to get the price you want for your home if the market is down. Selling your home in a hot seller’s market is also pricey, lawyer fees, real estate fees, taxes, etc. all add up!
Overall cost of owning is typically higher than renting even if the mortgage payment is lower than the rent. Here are some examples of things homeowners spend money on that renters do not:
- Trash pickup
- Water and Sewer
- Gardening/landscaping
- Driveway Upkeep
- Property Insurance
- Property Taxes
- Mortgage Interest
- Repairs and Maintenance
Homeowners may benefit from tax benefits, they can deduct out of pocket expenses and mortgage interest.
Buying in Ottawa is a challenge right now. Since 2019 the market has not stopped or slowed down. Buyers are competing against many others for the same home, some properties having five or more offers in one day. This is causing extremely fast sales and high pricing of homes.
Buy or Rent?
The choice to rent or buy all depends on your financial situation. A mortgage agent can be beneficial in letting you know what you can afford. You need to weigh out the pros and cons of each by evaluating your income, savings and how you want to live.
Purchasing a property can be an amazing investment and help you build equity. Whether you are looking for apartments for sale or single homes, the performance of the investment greatly depends on the location of the home, economy, environmental factors and real estate market conditions.
Homeowners can make more profit on their home investment if they put in the right upgrades. Here are some things that typically increase the value of homes:
- Kitchen – Quartz countertops, pot lights, stainless steel appliances, backsplash, cupboards, coloring, etc.
- Bathroom – Countertops, light fixtures, free standing tubs, tiling, etc.
- Basement – Bathroom, lighting, windows, flooring, etc.
- Flooring – Hardwood
- Paint – Neutral pain colours throughout
- Central Heating and A/C
Hiring a real estate professional to help in the sale of your home is crucial, they can guide you to make the most money out of your investment.
