Although owning a home is a lifelong ambition for many Canadians, it is not for everyone. Homeownership rates in Canada are currently high, but this hasn't always been the case. Traditionally, families had to either build their own homes or rent one from someone else. While renting has its drawbacks, it also has its benefits. For some people, renting makes more sense because of their financial situation.
You may have the funds for a down payment and a monthly mortgage payment, but buying a home is a considerably bigger commitment than those two sums. Anyone considering buying a property should have three to six months' worth of financial reserves set aside for basic budgeting needs. Consider how long you plan to live in a home before making a purchase. Do you intend to stay in a city for only a few years? Will your housing requirements change within that time period? If this is the case, renting may be a better option.
Canada has one of the world's greatest price disparities between renting and owning a home. The average mortgage payment for a three-bedroom home in Canada is 32.6 percent greater than the average rent for a comparable area, putting it in tenth place.
You are solely responsible for all maintenance and repairs when you own a home. When you rent, though, you won't have to worry about things breaking down or the roof leaking. You simply contact the landlord if something needs to be corrected. It is their responsibility to keep their property in good repair.
Rental prices are typically less than a mortgage payment, especially for smaller flats. Renting can save you hundreds of dollars a year, if not thousands which you should invest. You must keep in mind that there are numerous out-of-pocket expenses when purchasing a home, such as your mortgage and closing charges. Principal, interest, property taxes, mortgage insurance, homeowner's hazard insurance, flood insurance, and maybe condominium or association fees will all be included in your mortgage.
Owning a property requires a lot more sweat equity than buying crypto/stock or stock investments such as mutual funds, which is why you should invest the money you saved by renting. It's important to remember that you can build wealth without investing in real estate. Investing in stocks, bonds, and exchange-traded funds (ETF) with a licenced financial adviser or a low-commission investing software is a terrific way to build your wealth. You can even stake your cryptocurrency to earn a better rate of interest than banks!
Both renting and buying have their own set of advantages and disadvantages. Your lifestyle, present financial condition, and personal circumstances will determine which option is ideal for you. Before you make a significant commitment like buying a house with a 30-year mortgage, think twice!
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