The road to homeownership can be a rewarding journey. But despite the clear benefits of owning property, many Canadians are still tempted to rent. Rising interest rates, tougher mortgage rules, and the difficulty of saving up for a down payment are just some of the reasons people are intimidated to buy.
Although renting does have its perks, homeownership is an effective means of establishing wealth and putting yourself on a secure financial footing. If you’re still not convinced, here’s why we believe buying is always the better option.
Reason #1: Freedom to do whatever you want with the property
Yes, it’s true that renters don’t have to worry about leaky roofs, faulty plumbing, or shovelling the driveway. But they also don’t have the freedom to make changes to the home or improve its aesthetics either. If you own your property, you can change up those kitchen cabinets or put in a new bathroom countertop. No need to ask a landlord if you can hang that crystal chandelier or install a more eco-friendly door. It’s your home — you can do whatever you please.
Half the fun of homeownership is transforming the property to suit your tastes. A recent report by Altus Group
estimates Canadians have spent $74B in renovations in 2018. The average money spent on renovations is about $11,800 — with Ontario coming in slightly higher with average budgets of about $16,000.
Reason #2: You get to enjoy the benefits of appreciation
When you own your home, you’ll feel secure in knowing your monthly mortgage payments are going towards paying down your property. As your home appreciates in value, you’re building up equity that you can tap into down the line. Many experts believe investing in a property is much more stable and lucrative than investing in stocks. As the price of your home goes up, you’re gaining appreciation on the property’s entire value — not just your down payment.
You’re also gaining lifestyle benefits as you wait for your home to appreciate. You and your family get to live in this property with all the perks of homeownership. Whether you’re paying mortgage or rent, you must pay to live somewhere. Wouldn’t you rather your monthly payments go towards principle instead of making some landlord rich? And remember — you’re not only covering a landlord’s mortgage either. Landlords also make tenants pay a little extra so they can make a profit each month.
Reason #3: Mortgage costs stay the same while rents increase
Most mortgages typically renew every 5 years. This means your monthly mortgage payment is locked in until the renewal period. This allows for easy budgeting because no matter what the circumstances, your housing costs will remain the same. Stability is crucial in times of economic uncertainty, and you’ll appreciate having this peace of mind year-round.
Renters do not enjoy the same stability that homeowners do. Landlords are entitled to raise their rents each year. This means you’ll have to account for these increases when budgeting. And if you lose your job or an unexpected emergency pops up, you may be forced to move if you cannot afford these yearly increases.
Reason #4: Opportunity to build good credit
Although a mortgage is probably the biggest loan you’ll ever take on, it can actually help you build good credit. Buying a property is looked upon favourably by creditors because it’s considered a long-term investment. By paying your mortgage on time each month, you’ll be showing lenders that you’re responsible with your finances. And by having a good credit score, you’ll have an easier time getting approved for other loans.
This can help you achieve many goals that may have been very difficult, like finding the money to buy a new car or sending your kids to post-secondary school. Good credit will also help you land better mortgage rates when it’s time for renewal.
Reason #5: Tax benefits for homeowners
Canadian homeowners enjoy many tax benefits
that are not available to renters. For example, you can deduct your mortgage interest and property tax payments when you file your return each year. Or those new windows you had installed in the spring? You may be able to write them off. This is because you can get hundreds of dollars in government rebates for making your home energy efficient. If you happen to live in Northern Ontario, you can claim the Northern Ontario Energy Credit. This benefit helps low-to-moderate income residents with the higher energy costs associated with living up north.
Here are some other benefits you can look into as a homeowner:
- Home Buyers Tax Credit
- Ontario Senior Homeowners’ Property Tax Grant
- ecoENERGY Assessment Rebates
Buying property may seem overwhelming, but your investment will be well worth it in the long run. If you’re interested in homeownership, be sure to work with a qualified realtor. A trusted real estate agent can give you the confidence you need to navigate GTA’s housing market.
For more information on buying a home
, call Spectrum Realty at 416-736-6500 or contact us here