Should you rent your home, or buy it? Two-thirds of Canadians own their own homes, official data shows, so it's clear that for the most part, Canadians prefer to purchase their homes. It is usually considered a safe investment and a good retirement savings strategy. One good gauge of housing affordability is the ratio between rents and homes prices.
Beyond the overall price, the biggest factor is often the mortgage rate a homebuyer gets in order to finance it.
Checking the price-to-rent ratio (or P/R ratio) is one way to tell whether it's better to rent or buy. This figure helps you to see if the prices for homes in your area are fair. It is easy to calculate the P/R ratio. Simply find one house, condo or apartment that is for sale, and another similar one that is for rent. Second, divide the entire selling price of one home by what the rent costs for one year at the other. The P/R ratio is the solution.
You benefit in many ways when you sign a lease on a place to live. There is no worry about selling the home at a later date and waiting for somebody to buy before you can buy another home, if you are living in the home temporarily. Also, your landlord or building supervisor normally handles any problems with the property such as plumbing, fixtures, and lighting. Depending on where you rent, many utilities and amenities may be covered for you in the initial rent payment, cutting out extra bills. Lawn care may be handled for you.
Naturally, home ownership offers many advantages:
Rather than investing in a property you may eventually leave, and making a rent payments, instead you make a payment on the house and work closer to owning something.
You are under no restrictions when you buy a home. You are free to paint, renovate, and put up paintings without having to put it all back later.
You may have an easier time come tax season. You could receive tax breaks on restoration if you buy an historical home.
We have not yet made a decision on putting in a bid for where we live yet. However, when we do decide, I think we will understand the pros and cons of both avenues.
Discussions of homeownership should be grounded in reality. A home purchase won't solve your financial challenges. You lose a lot of the flexibility and freedom you might otherwise enjoy, and you can waste just as much as if you were renting. If purchasing a home is something you want, do it. But don't let anyone persuade you that you're throwing your money away by renting.
Beyond the overall price, the biggest factor is often the mortgage rate a homebuyer gets in order to finance it.
Checking the price-to-rent ratio (or P/R ratio) is one way to tell whether it's better to rent or buy. This figure helps you to see if the prices for homes in your area are fair. It is easy to calculate the P/R ratio. Simply find one house, condo or apartment that is for sale, and another similar one that is for rent. Second, divide the entire selling price of one home by what the rent costs for one year at the other. The P/R ratio is the solution.
You benefit in many ways when you sign a lease on a place to live. There is no worry about selling the home at a later date and waiting for somebody to buy before you can buy another home, if you are living in the home temporarily. Also, your landlord or building supervisor normally handles any problems with the property such as plumbing, fixtures, and lighting. Depending on where you rent, many utilities and amenities may be covered for you in the initial rent payment, cutting out extra bills. Lawn care may be handled for you.
Naturally, home ownership offers many advantages:
Rather than investing in a property you may eventually leave, and making a rent payments, instead you make a payment on the house and work closer to owning something.
You are under no restrictions when you buy a home. You are free to paint, renovate, and put up paintings without having to put it all back later.
You may have an easier time come tax season. You could receive tax breaks on restoration if you buy an historical home.
We have not yet made a decision on putting in a bid for where we live yet. However, when we do decide, I think we will understand the pros and cons of both avenues.
Discussions of homeownership should be grounded in reality. A home purchase won't solve your financial challenges. You lose a lot of the flexibility and freedom you might otherwise enjoy, and you can waste just as much as if you were renting. If purchasing a home is something you want, do it. But don't let anyone persuade you that you're throwing your money away by renting.
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