By Vern May
For many, the leap into home ownership is their ultimate goal. Still, an investment in real estate can be a daunting decision as it is a purchase that becomes a lengthy relationship with your lender. While the Edmonton home market has been solid and shown continued growth, many buyers carefully weigh the pros and cons of taking the plunge. If you’re renting and are currently on the fence about whether home ownership is the right choice for you, consider these top ten benefits of owning vs. renting.
- Your home purchase is an investment
Consider this: If you have been renting for ten years and your lease payment is $1,000 per month, you have spent $120,000 over the past decade without anything to show for that investment. Even after a considerable investment, the stability of your living situation is depending on your next month’s rent. As a home owner, you are investing in the real estate that you occupy, allowing you to build equity and reach the end of your journey holding onto a piece of property which contributes to your personal net worth.
- The financial forecast is firm
As a renter, your monthly financial commitment is subject to increases annually orat any point that your landlord may look to increase the rent. In reality, the fees you pay may be addressing that owner’s financial servicing of the property. Instead, you could be investing in your own property and locking in a mortgage for an extended term which protects you from annual or sudden increases in your monthly payments.
- Improve your credit score
When you have committed to a mortgage and make your monthly payments on time it demonstrates your financial reliability which has a positive impact on your credit score. Of course, the stronger your credit score, the better your positioning for financing on any other purchases you may be looking to buy.
- Collateral for other loans
Not only does your payment history on your mortgage reflect positively on your credit score, but the equity that you have built up in your home can be leveraged to finance other purchases as needed. Your home sits as one of the most significant assets that you can show as an asset to a potential lender.
- It encourages saving
As a renter, you don’t have to be concerned about routine or emergency maintenance. When the furnace breaks down, or a serious plumbing issue arises, you simply contact the landlord and task them with ensuring a timely remedy. However, as a homeowner, you are responsible for any repairs and maintenance that your property needs. To help lessen the burden when help is needed, homeowners are encouraged to build up a small savings account as an emergency fund. One hopes that they may never have to access it, but it doesn’t negatively impact your financial well-being to leave it sitting in an interest-earning account, either.
- Tax breaks
Get to know the tax benefits that are associated with your home as they can create a significant impact on your financial well-being. In some cases, property taxes are a deductible expense on your personal income tax application. Additionally, you should educate yourself about available home improvement and energy efficiency grants in your area which may allow you to reduce your annual energy consumption and save you money. Many Provincial and Federal programs exist as incentives to encourage the responsible use of energy as the world becomes more dependent on electricity to power a growing number of devices we use in our daily lives.
- It can create an income stream
Your direct investment in real estate as an income stream can create financial benefits in a number of ways. Once you have paid off your mortgage, of course you now have a property that you can endeavor to sell for a tidy profit outright. Another route might be to purchase the home as a rental property, levying a monthly rent which fully covers your costs to support the mortgage payments. Once the home is fully paidoff, your income potential increases significantly for the life of the property.
- It’s a resource for retirement
Many seniors who live in a home that has been fully paid for elect to unlock some of the equity that they have in their home through what is called a reverse mortgage to free up money to help support living expenses and purchases as needed. This can be a tremendous benefit to those on a fixed income that did not save a sufficient amount of money to support them in their golden years.
- Decorate as you wish
Perhaps one of the greatest and most obvious advantages of owning the home that you live in is that you have full creative autonomy about how you choose to decorate it. If you want to change the color palate of a room, remove non-load-bearing walls, or renovate to ensure that your interior design reflects your personal taste, you can do it. Unlike renting when you might have to ask permission before changing up your space, as a home owner, you have freedom to modify your space to make it your own. That also includes your yard and outdoor spaces.
- Set down roots
What many people enjoy about home ownership is that is allows you to stop moving. When you can nail down a fixed address, it is considered easier to develop your social circle and build trust with neighbors. As a home owner, you are also more likely to participate in community projects and initiatives – both socially and emotionally.
Still not sure if home-ownership is right for you?
At SellerInvite, we have helped buyers just like you to navigate the Edmonton housing market and find the best solution that meets both their needs and their budget. Whether you’re looking at a starter home that you can renovate, or you’ve set your sights on the dream home where you want to live out the rest of your days, we can help to identify the advantages and opportunities before you. Contact us to learn more about our industry-leading incentives for buyers and how we can help you get into your next home