If you live in the Hamilton area, you may feel house prices have risen beyond your reach leaving you wondering: Should I buy or should I rent? There are many pros and cons to both renting and owning but at the end of the day what you value as important will determine what is right for you. Here are 4 reasons that will help you decide.
Many renters prefer renting an apartment to owning a home for this one simple reason, renters are not normally responsible for maintaining the property. For those who lack the knowledge of what necessary maintenance is required to preserve the integrity of a home, the good news is as a renter you don’t have to. Aside from maintaining the confinements of the unit you rent, for people renting that is it. The responsibility of managing the property such as ensuring pathways and parking spaces are shovelled in winter and grass is cut in the summer falls to the landlord. There are no gutters to clean and no financial burdens or frustrations associated with fixing plumbing fixtures, electrics or new roofs. If you are renting a house there may be some basic maintenance required, therefore you should review the lease.
On the flip side, as an owner you don’t have the frustration of dealing with a cheap landlord/slumlord who neglects his or her duties such as tending to necessary fixes. You are the master of your own domain and the value of your property is dependant on how prudent you are. If the property is in chaos, you are the one in control and it is down to you to rectify it as you choose.
There is a happy medium. Condominiums can offer the best of both worlds. You are the master of your own private unit with the benefit of a property management company maintaining the exterior property for a condominium fee. For some, this option is the perfect transition into first time ownership, especially those with limited knowledge of how to maintain your home.
A common complaint from renters is dealing with noisy neighbours. From music thumping through the walls to listening to the ‘click’ ‘clunk’ of the neighbour above you who likes to walk around in her high heels. What do you do if one neighbour is frequently fighting? Close proximity to your neighbours for some is reason enough to buy their own home.
The pros for a renter means 60 days notice and you can pick up and move to a new location that is both comfy and has fewer or less noisy neighbours.
For an owner’s perspective, your neighbours are much like a marriage. If you don’t like your neighbours it is not as easy to sell up and move and can be a rather costly solution if you don’t get along. On the other hand, fast and long lasting friendships have been formed from the off-chance of living next door to a compatible friend.
If you are still asking: should I buy or should I rent, then perhaps reason no. 3 will be the deciding factor. When finances are an issue, renting can provide a greater opportunity to live in the areas you desire. For example, if you are young, newly graduated, limited funds and want to live in the urban city centre, purchasing would likely be out of the question. However finding a rental suite could be a more affordable option and allow you to live where you want. You even have the option of finding a roommate to share the cost of renting which can make it even more affordable.
Purchasing in some of the more highly sought after and costly neighbourhoods will come down to affordability and this may or may not be possible.
Finally we come to the last and for some the most important reason, buying or renting may come down to a long term goal such as building equity. Have you ever looked at a cost comparison of renting or purchasing over an expended period of time? See the information below.
Monthly rent: $2,100
Monthly renter’s insurance: $30
% Rent will increase each year: 3%
Home Price: $350,000
Down Payment: 20%
Interest Rate: 5.125%
Loan Term: 30 years
Closing Cost For Buying: $1,500
Land Transfer Tax: $3,725
Annual Property Taxes: 1.25%
Average Monthly Maintenance: $125
Homeowner’s Monthly Insurance: $100
How Much Will Your Home Appreciate Each Year: 4%
Other Monthly Costs: $50
How long will you live in the property? 5 years
Real Estate Agent Commission: 6%
Closing Cost For Selling: $2000
Should I buy or should I rent? Tell us what you plan to do.
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