Spring Hatches the Great Debate: Is it time to Rent or Buy?

Spring Hatches the Great Debate: Is it Time to Rent or To Buy? 

In the Real Estate world, spring has sprung and so has the age old debate of “Rent vs. Buy?”

To buy is to build equity in your future. To rent is a virtual license to pour hard earned money down the drain.

To buy is to see gains surpass those in a good stock market portfolio during rockier times on Wall Street. To rent is to enable landlords to own and often prosper.

Do you sense a bit of a clash of dynamics in that last scenario? Financial experts say this is a prime time for first time buyers and investors alike. With continued low mortgage rates the ‘Rent vs. Buy’ question seems all but moot.

Market economists enlighten us to the fact that market movement among buyers and sellers is very much dependent on the influx of first time buyers into the market at the entry level to allow current owners to sell and ‘buy up’ facilitating upward mobility through the home pricing grid enabling ‘top end’ sellers to do so and downsize. It’s the cyclical dynamic of any market. 

Let’s take a look at both sides of the equation that consumers are considering:

Owning
  • Your mortgage payments are gradually building equity in your property
  • Over time market appreciation in your property is like ‘found money’ and as a principle residence a tax free gain upon the sale
  • Falling mortgage rates in a variable rate mortgage applies more of your payment to the principal, building equity faster
  • You are ‘king’ of the castle free to make your home uniquely yours
  • Financial benefit escalates with long term residency particularly when you become mortgage free
  • Maintenance costs are your responsibility
Renting
  • Your rental payments are building your landlord’s retirement plan
  • Your rent will increase over time within certain guidelines
  • Falling mortgage rates makes no difference in your rental payment
  • You must respect the limitations or guidelines of your landlord or strata council
  • Financial benefit favours frequent movers not interested in ‘setting down roots’
  • Maintenance costs are your landlord’s responsibility

For those first time buyers, there is so much I can offer in guidance on best strategies for buying, best financing and best transition tools from the rental to the ownership arena. Please contact me at 604.739.1129 orhomes@pamelasmith.ca for a free, no obligation consultation.  

Timing is everything!  If you are considering listing your property, the time is now.  As we get closer to the spring market, more and more properties will be coming onto the market, which increases competition.  Make your property stand out! Get your property on the market before others do.