Should You Rent or Buy Your Next Home?

Should you rent or buy? That depends on your circumstances.

First let’s consider the pros and cons of renting.

Pros

1.        Short term fixed costs. You pay the rent and the landlord worries about the mortgage, maintenance and taxes.
2.        Low commitment. Most leases run for one year and in some cases two years.
3.        Easy qualification. Provided you can show income and a enjoy good credit record most landlords will welcome you with open arms.

Cons

1.        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?
2.        Increased costs. Your costs could change in 12 months’ time. The landlord is within their rights to negotiate an increase in your rent at the end of the lease.
3.        No equity. Your rent is simply an expense. It’s your landlord that his enjoying the equity build up.
4.        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.

Pros

1.        You will enjoy security! You can stay in your home for as long as you desire.
2.        You can decorate and make it your home.
3.        It’s easier to own pets when you own your own home.
4.        Fixed costs. Taxes may change but it’s possible to lock in your mortgage for 3 years or more creating certainty for you.
5.        Over time your home will appreciate in value. Over time you will pay down your mortgage. You will eventually create wealth.

Cons

1.        You will need to qualify for a mortgage, (unless you are paying cash).
2.        You will be responsible for maintenance and taxes.
3.        It’s not always as cheap to buy compared to renting.
4.        Ownership is really a mid to long term opportunity.
5.        Your home’s value could go down or up.

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.

To shop for ALL homes in the metro Edmonton area please go to our website www.AmbergateHomes.ca.

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