Many Canadians aspire to become a homeowner at some point during their lives. But we’ve done our research and looked at both the pros and cons of homeownership. Is owning your home better than renting? Here’s what we discovered.
The Pros of Homeownership
While you may have dreamed of white picket fences and cul-de-sacs straight from Wisteria Lane, the truth is in the details. Here are the pros of owning your own home.
• The allowance of creativity. In your own home, you get to decide how to decorate and landscape. If you want to knock a wall down or put in a swimming pool, you don’t have to ask a landlord – you just do it.
• Plant your roots. Homeownership allows you to plant roots and settle yourself and your family in the same house until you decide to move. Your kids are established in school and your family settles into a routine.
• Improve your credit. If you don’t neglect your mortgage payments, your credit profile will look appealing to banks when you need a loan for renovations or other things that pop up.
• Build equity. If you plan to remain in the same home for a long period of time, you can add value to your assets. Over time your personal wealth gains momentum by staying in your home. You are likely to make a profit should you sell after a decade or more. Your location and the state of the economy determine the value of your home.
The Cons of Homeownership
• Larger financial commitment. Renting provides the luxury of calling someone else when the sink breaks or the hot water pump goes out. Help is just a phone call away and normally does not come out of your bank account. Owning a home puts you at risk for the cost of repairs and upkeep that may at times be costly.
• Lack of flexibility. When you rent a home, you are locked into a fixed-term contract. When your lease is up, you may choose to renew it or walk away. However, owning your own home requires a tremendous financial burden if you don’t sell it right away. You may be stuck with two mortgages should your job transfer you to another city.
• Less simplicity in life. Wanting to lead a simple lifestyle? Homeownership won’t always fit your need. If you rent, you simply fulfill the lease agreement. When it is time to move, you pack your belongings and go. All you need is another place to live. Homeownership requires much more. Selling a home may be costly and take a long period of time. You won’t be able to simply pack your things up and move across country until you sell your home and meet the stipulations of the sale agreement.