by Stuart Neal
on Friday, March 1st, 2019 at 11:54am.
At some point most of us consider our housing options. Should you rent or buy? That depends on your circumstances. For many downsizers renting makes sense. For single people or folks just starting out its also an attractive option.
First let’s consider the pros and cons of renting.
Short term fixed costs. You pay the rent and the landlord worries about the mortgage, maintenance and taxes.
Low commitment. Most leases run for one year and in some cases two years or more.
Easy qualification. Provided you have income and a good credit record most landlords will welcome you with open arms.
Uncertainty. You could be moving in 12 months. If your lease is for only 12 months the landlord has the option to ask you move out at the end. Moving is considered one of the most stressful things we ever do in life. Do you really want to move that often?
Increased costs. Your costs could change in 12 months’ time. The landlord is perfectly within their rights to negotiate an increase in your rent at the end of the lease.
No equity. Your rent is simply an expense. When you move out there is nothing left.
Restrictions. Don’t expect to be able to paint the walls whatever colours you want. If your pet dog or cat bothers the neighbours you could be asked to move out.
Now let’s look at the Pros and Cons of ownership.
You will need to qualify for a mortgage, (unless you are paying cash).
You will be responsible for maintenance and taxes.
Its not always as cheap to buy compared to renting.
Ownership is really a mid to long term opportunity.
Your homes value could go down or up.
You can stay in your home for as long as you desire. You will enjoy security!
You can decorate however you want and make it your home.
Its easier to own pets when you own your own home.
Fixed costs. Taxes may change but its possible to lock in your mortgage for 3 years or more creating certainty for you.
You will create equity and hence wealth, as you pay down the mortgage and as your home appreciates in value.
Renting is a great option if you are new to an area or when your short-term housing needs are uncertain. Renting therefore suits younger people who don’t yet have families, or it may suit older people who wish to free up money for living expense.
For the rest of us that is those who are in long term relationships, desiring to be in one community for a few years, or those of us raising families, owning a home is usually the best way to go.