Articles
Real Estate - Do I Rent or Do I Buy?
One thing is for sure; we all know that we need a roof over our heads. In many peoples' cases the question is "Do I RENT or BUY that roof?"
Whether you RENT or whether you BUY it's a long-term exercise. Investment in Real Estate has always been considered a Long-Term Investment. The real question you need to ask yourself; "Do I really want to pay RENT for the rest of my life?" Generally, a home makes financial sense if you are going to live in it for at least three years, or preferably longer. When you buy you need to take into consideration the costs involved in buying and selling a home; from appraisal fees to home inspections to real estate commissions, and possibly other fees.
When people lose money in the real estate market it is usually because they did not own it long enough. It is unusual to make a good profit in real estate in the first 3 years. In fact, the market may fall after you buy your home. Keep in mind, that the longer you own your property, history has shown that there is a better chance of profiting when you come to sell.
Another point in favour of BUYING, real estate has proven to be one of the most stable long-term investments there is. Most people find that investment in realty is a big part of their retirement strategy and financial security. Overall, it is far better to own your own home than rent. Not only for the pride of ownership but because it is your only long-term hedge against inflation. With rental rates increasing constantly, financial planning in a rental market is difficult as the years go on.
In conclusion, as long as you can afford the down payment and maintain the monthly mortgage payments the advantages of owning a home certainly outweigh those of renting. However, I strongly suggest you seek sound advice before making your choice.
I have a very good golfing buddy who has rented his home since arriving in Canada in the late 1970s. He and his wife have very good jobs, and have had no trouble making the monthly payments. Just the same they could easily have made the mortgage payments. However, imagine how many times they could have bought that home at its original price, and what it would be worth today. Since it could be a sensitive topic, I have never broached the subject with either of them. However, they sure could have done with some good advice.
Ian Raynor is a Realtor with Coldwell Banker Innovators Realty and currently has a number of commercial listings in Ontario. Oct/07. www.properties2discover.com
