So, you’re thinking about buying a home in the Bow Valley? How exciting! When standing on the precipice between renting and buying, it can be challenging to determine which option is best for you. As with any market, both have pros and cons, and the Bow Valley is no different. We’re not in the business of telling you what to do regarding life’s most significant decisions, but we will happily offer you some perspective. So, here are some pros and cons of buying and renting for you to consider.
Pros of Buying
While buying a home has been painted as the ultimate goal for many of us, there are both upsides and downsides. Here are some of the advantages:
- Building Equity: A home is an asset; if you don’t encounter a crash, it can act as a forced savings account. Rather than paying rent into someone elses asset, you get to pay into an asset you own and build equity.
- Tax Benefits: Some tax benefits come along with home ownership in the form of various tax deductions you wouldn’t have access to as a renter.
- Total Control: As an owner, you have the power to decide small things like getting a pet or a roommate, as well as more significant things like renovations and enhancements to the home. While you have to follow the rules of your board, building, or community, you have far more control than you might as a renter.
- Sense of Stability: Once you own a home, you can alleviate the stress of potential eviction or housing instability as you have a home on your own. Even though you still have some vulnerabilities, the sense of security can be hugely impactful. Beyond that, you may worry less about where you might settle down or buy a home one day, as that has already been checked off the list.
- Predictable Payments: Unlike a landlord who may raise the rent or a rental market that may shift, you can enjoy fixed-rate mortgage payments.
Cons of Buying
With pros come cons. Buying a house is a big commitment. Here are some cons to consider:
- Increased Responsibility: If your home needs repairs or an appliance breaks, you don’t have a landlord to call. You are the one in charge of getting things done, and you’re also responsible for paying for it.
- Market Shifts: In buying real estate, you’re always at the whim of the market. If your property decreases in value, your equity is on the line. Making smart investments is helpful, but sadly you can’t look into the future for definite answers.
- Down Payment: No matter how affordable your home is, you’ll need to fork out a down payment. For many people, this means emptying their bank accounts.
- Commitment: Once you own, you can’t pack up and move away on a whim. With stability comes responsibility, and big life changes become more complex.
- Taxes & Fees: Property taxes, insurance, HOA fees, and other bills will need to be paid. This is important to factor in when you’re running the numbers.
Pros of Renting
While renting gets a bad rap, there are some benefits. Let’s talk about those:
- Affordability: Rent tends to be more affordable than mortgage payments, and you don’t have to worry about the additional bills that come with home ownership.
- No Down Payment: Furthermore, you don’t need to pay a down payment on a rental. You may have to pay a deposit, but it will be a tiny fraction of what a down payment on a house would be. If you don’t have a ton of savings or a predictable income into the future, avoiding huge investments like this might be wise.
- Flexibility: As a renter, you can give notice and move without much cost or stress. Every lease agreement is different, but it’s far less severe than moving from a home you own.
- Low Responsibility: If there’s a leak, plumbing issue, broken appliance, or property management issue, it’s not your responsibility to fix or pay for it.
Cons of Renting
Renting has its cons, too. There’s a reason people are still so interested in buying, after all. Here are some of the cons:
- Instability: You don’t get to benefit from a homeowner's security. As a renter, you may constantly worry about being told your landlord is selling, dealing with a wrongful eviction, or finding yourself in a time crunch to find a place without warning.
- Unfixed Rent: Landlords can raise your rent when your lease ends. Therefore, it’s tough to know if you’ll be able to afford your place for years.
- No Final Say: As a renter, you often don’t have much say in things like pets, roommates, renovations, and other things that you may want to control. You may not even have a say in if you can put a nail in the wall or not.
- Not Your Asset: As a renter, you’re paying someone elses mortgage instead of your own. Therefore, you aren’t building equity through your dwelling.
This story was made possible by our Community Partners Program. Thank you Peak Performance Painting for helping to expand local news coverage in the Bow Valley. Learn more.
