Good buyers like valleys
To rent or to buy?
Everyone needs a place to live. But should you rent your home, or buy it?
Home ownership is the biggest financial investment most people will ever make but, like any major life decision, you need to weigh the pros and cons in order to decide if it’s the right choice for you.
In many communities and price ranges, the monthly cost of home ownership is roughly comparable to the cost of renting. In this case, the equity, or increased value of your home over time, incentivizes ownership. Despite the usual dips and valleys of property values, real estate values have historically risen over the long term. Watch for the valleys and purchase your home at or near the bottom of the curve.
We’ve just gone through about five years of depreciating market prices. Market projections surmise that prices are at or near the bottom and are beginning to stabilize, making it a terrific time to buy – particularly for condominiums and executive style homes.
However, price increases this time around may not be as dramatic as they were in the early 2000s. Slow and steady is more likely, so plan to hold on to your property for at least five years. If you’re expecting to move within three years or so, renting might be a better option, as your equity increase may not cover the costs of selling. You might also choose to purchase a “fixer upper,” a property in an area that’s expected to improve quickly or a holding property that can be developed in the future. Your real estate agent can help you identify properties that offer these kinds of opportunities.
There are several excellent online tools to help you decide whether renting or buying makes sense for your monthly budget. Simply send me an email and I’ll forward you the links.
Janet Scotland is managing broker and owner of Century 21 Arbutus Realty. Visit www.janetscotland.ca or e-mail janet.scotland@century21ca