The Benefits of Buying a Home vs. Renting

The prospect of buying a new home may seem intimidating for many young people or first-time home buyers. There are certainly up-front costs that need to be considered and, depending on your financial situation, renting may be a more attractive option.

However, with the cost of rent increasing at a fast pace, now is a good time to look at the pros and cons of buying vs. renting a home and see if renting is truly the best route for you.

Benefits of Renting a Home

1. No Down Payment

While you will need to provide a security deposit when you start renting a place, this will typically only amount to a month’s rent. Buying a home requires a much steeper up-front cost, which some people may struggle to acquire. If you have more immediate financial concerns, renting might be the best option for you until you’re in a more stable position.

2. No Maintenance or Repair Costs

Homes require a lot of maintenance, and appliances or other fixtures will need repairs or replacement from time to time. These surprise costs can be a financial burden, especially if several repairs are required at once. If you’re a renter, your landlord is responsible for building maintenance and any repairs that may crop up. All you need to do is give them a call when something starts leaking or breaks down.

3. Lower Expenses

Aside from not having to worry about repair costs, there are other areas where renters save. You don’t need to worry about property taxes and your insurance as a renter will likely be cheaper than home insurance. Renting a small place, such as an apartment, will also help you save on utility costs.

4. Flexibility

As a renter, it’s less of a hassle to move or downsize to a smaller place than if you own a home. Once your lease is up, you’re free to move on.

Cons of Renting a Home

1. Less Control

If you want to make any changes to your home as a renter, you’ll need to get permission from the owner first. Even simple changes, like painting the walls, require approval. Landlords may also impose other restrictions, such as not allowing pets.

2. No Benefit to Credit Score

Did you know that paying off your mortgage will help to build your credit score? Paying your rent on time won’t come with the same benefit.

3. Can’t Build Equity

While renting comes with less initial costs, owning your home leads to greater long-term financial benefits. Every mortgage payment brings you closer to fully owning your home and builds your equity!

4. Less Stability

While renting allows for greater freedom if you want to move, if you want to stay in the same place, you’ll need to constantly renew your lease. The typical length of an apartment lease can range from 6 months to 2 years, and your rent may be raised each time your lease is renewed, whereas you can negotiate a fixed mortgage rate that can be locked in for a much longer period of time.

Benefits of Buying a Home

1. Freedom to Make Changes

Since you own your home, you’re free to make any changes to it you want. If you want to change up the wall colors or replace the flooring, you can go ahead and do it. You make the rules.

2. Tax Benefits

If you own your home, you may be eligible for a variety of tax benefits. For example, first-time home buyers in Canada may be eligible for the First-Time Home Buyers’ Tax Credit. If you’re considering buying a home, it’s worth looking into what tax benefits are available for you.

3. Security

A house is a valuable asset that can help you establish a nest egg and strong financial foundation for your future. As you pay off your mortgage and build equity, you will also have more options for borrowing money in the event of an emergency.

4. Appreciation

While there is no guarantee, most homes will appreciate in value over time. This makes buying a home a great investment, especially if you plan to live there for many years and are in a position to ride out any unfavourable short-term market trends that may arise.

Cons of Buying a Home

1. High Upfront Costs

A down payment for a home is a significant expense and it isn’t financially within reach for everyone. The lower costs of renting may put you in a better position to save up money or tackle other financial concerns.

2. Property Taxes

On top of your mortgage, you’ll need to pay property taxes every year when you own your home. This is something you’ll need to factor into your budget when considering if home ownership is right for you.

3. You’re responsible for Maintenance and Repairs

A house requires upkeep to ensure it stays in good condition. You’ll be responsible for caring for your lawn and for performing any annual maintenance tasks, such as replacing furnace filters, to keep your house in good shape. If anything breaks down, you’ll also be on the hook to pay for repairs.

Let’s Build Your Home the Alquinn Way

If you’ve decided that home ownership is the right choice for you, let us build you a home The Alquinn Way.

We know that behind every house we build is a real person and family who will be living their lives within its walls. That’s why our mission is to build space for life. Our homes are crafted to accommodate the needs of our clients, so they can enjoy living in their new home for many years to come.

Reach out and connect with an Alquinn Homes home consultant today!