As the housing marketing continues to change in 2021, one of the most common questions that’s asked is: what’s cheaper: buying or renting?
Renting has become the norm for many people in the less affordable areas of B.C. like Vancouver, but does that mean getting a home is the better choice?
We explore the pros and cons of buying and renting a house to help you make the choice that’s right for you.
Benefits of Buying a Home
There are so many reasons why owning a home has and will be beneficial to many people. For starters, you own your home in its entirety which enables you to make as many or few changes as you like. You can redo your kitchen, add another floor, finally put screws in the wall to hang up pictures, and many more other renovations and changes.
By buying a home you also make your own rules. You’re not subject to pet restrictions, curfews, noise limitations (within bylaw regulations), or total occupancy of a place. Your home is a castle and you get to be the leader of it.
Plus, a home is usually the most valuable asset you can own. In general, your home will increase in value over time. By gradually working on it and improving its value you can make a profit off it when you eventually sell it. However, we recommend owning a home for at least 5 years to get the maximum appreciation possible on it.
Drawbacks of Buying a Home
As with many aspects of life, owning a home doesn’t come without a few downsides. One of the biggest differences is maintenance. You’re now completely responsible for paying for and either fixing or getting someone to fix anything that breaks. No landlord will bail you out.
Of course, you can also choose how you want it to be fixed and when. You can even do it yourself if you want to build your skills.
Usually, it’s more affordable to rent your home in the short term, but this highly depends on your mortgage.
Benefits of Renting a Home
Unlike buying a home which requires a longer commitment to see the best rewards, renting offers a huge amount of flexibility. Leases typically cover 6 months to a year meaning you can always jump to a new place that better suits your needs when the lease expires. Some landlords even offer month-to-month rent although this is less common.
By and large, renting is usually much cheaper than buying a home which makes it appealing to many younger couples or young adults. Other costs are also often bundled into rent like utilities and internet often making it even more affordable.
Other savings you also get to reap include any maintenance costs as it is the responsibility of the landlord to repair items that break.
Drawbacks of Renting a Home
Unlike owning a home, with renting, you never have a stake in the place you live. Instead, your rent will generally go to a landlord’s mortgage. Bear in mind, as long as you’re renting you’re not building equity you could be gaining to help with retirement.
Within the appropriate regulations, landlords get to make all the rules and sometimes this can be problematic. There are plenty of people who have had less than ideal dealings with landlords because of this, but again, this depends on who you’re renting from.
Once your lease is up, landlords can also increase your rent if they so choose. However, bear in mind that for 2021, landlords cannot raise rent prices until July 20, 2021 per the government of B.C. regulations due to the pandemic. Once that period is over landlords may only increase rent by 1.4% if they choose to.
Overall, choosing the right home comes down to what makes sense for you. Some people are ready to buy a home while others just need a place to rent for the time being. Always make the right choice for your needs.