Buying a Home Makes Renovations & Customizations Easier
Do you dream of making your home just the way you want it? Then buying makes that much easier. When you rent, your tenancy arrangement typically restricts what customizations you can make to your living area – assuming you get to make any at all. If you have a good relationship with your landlord, they might give special permission for renos that normally wouldn’t be allowed. However, it can also feel like a waste of time and money to make those renos on someone else’s property. If you buy a house without a strata, you’ll have more freedom to make your home truly your own. However, strata housing units like an apartment, condo, townhouse, or duplex may still have strict restrictions for what alterations or improvements you can or can’t do.
Buying a Home Creates Stability
When it comes to buying a home, the cliché of putting down roots is true. Owning your residence creates a level of stability that’s hard to achieve through renting. This helps bring peace of mind when you want to stay in the same place for a long time. However, it also isn’t compatible with everyone’s lifestyles. If your job or other circumstances require you to move often, then the flexibility of a lease agreement can be preferable to a mortgage contract. Some people just like to change where they live often, and that’s perfectly fine too. When buying a home, choosing to live there or rent it out for at least a few years helps avoid losing out on your unrecoverable purchasing and selling costs (you could even end up losing money). Before committing to a mortgage, it’s also often a good idea to try living in an area first to make sure that you really want to put your roots down there.
Building Home Equity
Building home equity is often the biggest reason people buy a home. With every mortgage payment, you’ll own a bit more of your home. If you manage to completely pay it off, then that home will be yours to live in “rent free.” But realistically speaking, this is a process that can take decades, and a lot can happen in that time. Some Canadians instead look towards their home as a shorter term investment, hoping to take advantage of rising property prices to sell the residence at a profit. However, there’s no guarantee that you’ll be able to sell at the price you want when you want to.
This can be a big problem for those who buy homes they can’t afford in the long run. It can lead to tremendous losses or even an underwater mortgage where more is owed on the house than the house is actually worth. Canadians can be vulnerable to this during times of low interest rates. Low rates make getting a mortgage seem cheap, and even though you had to pass a stress test, you get used to making your payments based on a lower rate. Then when rates inevitably rise, many homeowners who borrowed to their limits find themselves suddenly shackled to higher payments than they can handle.
All this isn’t to say that building home equity is bad. In fact, it’s one of the best investments you can make for your future. But it isn’t foolproof either. Rather than risk getting burned by relying on making a quick profit, it’s much safer to buy a home that’s completely within your budget and that you could live in for a long time – even if you don’t actually plan on doing so. Whether it’s an apartment, house, or whatever else, your principal residence should be a place you can afford.