Renting vs owning? As a Realtor, it’s a question I get asked on a daily basis.
My simple answer is that owning your own home is an investment in YOUR future – not your landlord’s.
Now let me say that buying ISN’T for everyone! Everybody has a different financial situation or different circumstances and I totally understand that. This isn’t a video to say that EVERYONE should be going out and buying a home, but for many people, maybe like yourself, they’re currently renting a home when they really should be focused on buying.
For those of you watching this that ARE renting but aren’t in a financial position to buy yet, whether that be saving the down payment, bad credit, or not enough income, we’ve got another video that helps give guidance there.
But for this video – I’m going to be talking about renting vs. owning.
When you rent, you are essentially helping your landlord pay off their mortgage.
Great for them but not so great for you.
That means that as a renter, you could end up paying tens or hundreds of thousands of dollars over the years without getting anything to call your own.
And since you don’t own the home, in most cases, you can’t make improvements, updates or changes without your landlord’s permission. Even if your landlord allows you to, there will be no return on the time or money you invest in the property. That nice kitchen you updated? The new flooring you put in? Thanks for the reno and see ya later when you leave! I’m sure the NEW tenants will really appreciate it! 😊
What about repairs?
While you may not have to pay for the cost of most repairs, you may have a landlord that is slow to do them or doesn’t do them at all. That leaky faucet keeping you up all night? Fridge stopped working and all your food went bad? Are you really going to wait for your landlord to get around to it if you have a hard time getting ahold of them? Or maybe you go ahead and cover the cost yourself and try and get reimbursed? Not always an easy process depending on your landlord.
In this fast paced Real Estate market, stability can also be a HUGE concern. You could find yourself in a situation where your landlords put the property up for sale and every day you have a request for a possible buyer to view YOUR home. And with the property notice, you have to let them! Not only that, each showing brings you closer to eviction when the property sells, how fun does that sound?
Moving to another rental can be costly, inconvenient and in THIS rental market, VERY difficult!
For example, in Surrey there is currently there is a .4% vacancy rate. What does that mean? That means for every 100 rental units available, .4 are available OR one in every 250 rentals are available! How might you feel if you have a month to move and these are the numbers you’re faced with?
So how is owning your own home different?
Probably the most important difference is that for every payment you make on your mortgage, you are actually building what’s called EQUITY in your home.
“Home equity” is measured as what you own, minus what you owe.
A simple way to look at this is that if you RENT 0% of your monthly payments build equity. It’s purely an expense for the cost of living there. When you OWN, roughly 40% to 60% of your monthly payments is building equity! So if your mortgage payment is $1400, anywhere from $500-$800 of that is going directly to pay down your mortgage, AKA building equity! Think of equity as an asset. Assets are good.
So folks if you’re currently renting right now and are still not sure if buying a home is the right decision for you, give me a call or maybe this blog post will convince you! You might not be there yet, but whether you want to buy in 3 months or 3 YEARS I can definitely help get you started!
Hope you guys found this helpful and as always, I’m happy to answer ANY questions about this video or any other Real Estate questions you might have!