Owning vs. Renting
The most common struggle first time home buyers encounter is when to take the plunge into home ownership. Buying your first home is a big commitment and deciding whether to rent or own is a challenge. The most important things to consider when making this decision are:
Current living situation
Many of our first time buyers are currently living with family or are in a stable rental at a decent rate. These buyers are under no immediate pressure to buy but they understand the value of owning. We often recommend pre-construction to these buyers as they have the time to wait for their home to be built. The benefits of pre-construction are discussed below. However, in other cases many of our clients are new to the city or have entered the rental market recently and are paying a significant amount in rent. For these individuals it does not make financial sense to rent long term.
How long you expect to live in your next home
The duration you expect to live in your first home is important to consider. This is something we always discuss with first time buyers. Home ownership is a great investment but there are many expenses first time buyers are not aware of. First time buyers receive a number of tax exemptions and rebates, which makes buying your first home easier. However, when it comes time to sell there are several taxes and fees the homeowners are required to pay. If you expect to change jobs, grow your family, or move to be close to a specific school within 5 years it may not be wise to buy. Our clients have seen the best return on their investment when they have owned a property for at least 5 years.
Will you be making any major compromises?
Many of our clients are excited to become homeowners. However, once we determine their budget and what they are looking for it become obvious that it may not be the right choice for them. Often clients’ excitement overshadows the compromises they will be making in their daily lives. If a client is going to extend their commute significantly or stretch their budget and take on a large mortgage in order to live in the perfect neighbourhood we will advise otherwise. Compromises can quickly overshadow the benefits of homeownership. We want to ensure our clients are improving their quality of life and not limiting it.