Should I Rent or Buy a Home
To buy or not to buy a home in Vancouver? It's a question many Vancouverites struggle with. And it's important to know if you truly want to own a home before you decide in taking the next step in the home buying process.
To help you decide, here are some general advantages and disadvantages of homeownership in Vancouver.
Advantages of buying a home in Vancouver
A sound investment. If you choose a home you can afford, the payoff can be great. When you make a mortgage payment each month, you build equity in a place of your own (unlike a rent payment). Equity is the difference between the value of the home and your outstanding mortgage. The longer you stay in your home (and the more payments you make), the more equity you'll have. And, unlike most things you buy, a home will almost certainly increase in value over time – which builds even more equity.
A first step to building equity. As you build up equity in your current home and comfort level in being a homeowner, it may be easier to move up to another home in the future.
Satisfaction and security. As a homeowner, you can decorate and renovate your home any way you like. You don't have that luxury as a renter. Owning a home also gives you a new sense of pride in your surroundings. Your family may also feel strong ties to your community.
Disadvantages of buying a home in Vancouver
Higher costs. When budgeting, you'll have to factor in more than your monthly mortgage payments. Consider things like condo maintenance fees and repair expenses. However, with today’s high cost of living in Vancouver, it might be very similar payments to what you spend today.
Tying up cash. Your home will probably increase in value as time goes by, but don't count on getting a big return quickly. If you need to sell your home during the first few years of homeownership, you could lose money given the various costs involved, although many factors need to be considered, I have met a hand full of people that do very well buying and selling homes in Vancouver in a short period of time.
No guarantees. There's no guarantee your home will increase in value, especially during the first few years. Although historically, over the longer term, homes have proven to increase in value, many people see their homes as an important part of their retirement plan.
To calculate your personal cost difference between renting and buying used this Rent vs. Buy Calculator below by Dominion Lending.