Control Over How You Live
The three big control issues you don’t have when you rent are how you live, where you live and when you have to move. When you live in your own home, you have substantially more control over how you go about your daily life. If you own a home, you get to choose whether you want to renovate, landscape or decorate. If you rent, you may not have as much control over these and other factors. No one likes to be told how to live. Chances are, neither do you.
One of the biggest frustrations with renting is the fact that you could be forced to move at any time
Control Over Where You Live
This one might not be so obvious, but when you think about it, you can’t just rent anywhere. But you could buy anywhere. Assuming you can afford the mortgage, you could ask almost anyone if they would sell their house, but you wouldn’t knock on someone’s door and say, “can I rent this place?” What homeownership affords is control over where you live. The choice of neighbourhoods or areas you could live in is only limited by your pocketbook. After all, location is the most important part of real estate; where you are dictates your proximity to work, schools, activities and events. It’s a big deal.
Control Over When You Move
Moving can be expensive and disruptive, so one of the biggest frustrations with renting is the fact that you could be forced to move at any time and on fairly short notice. If you don’t want to move, being forced out can be even more upsetting. When you buy, you won’t be forced to move – ever – unless you stop making your mortgage payments. You can rest easy in knowing that you will never receive a notice telling you to move out.
When you rent, your rent can increase every year, but when you buy a home, your mortgage payment is the same
Control Over Your Monthly Payments
When you rent, your rent can increase every year, but when you buy a home, your mortgage payment is the same for the term of your mortgage – often five years. This way you can hedge against increases in housing costs by locking yourself in for a longer term. This is perfect for keeping surprises at a minimum while budgeting for your future.
The Security of Gaining Equity
Every time you pay rent, you’re just paying for the right to live in a certain place. Beyond that, there aren’t any extra perks to that payment. When you pay a mortgage payment, you are paying into eventually owning (and not making payments on) a home. With every payment, you’re putting money away for the future. At first, the payments will mostly be interest, but as you keep paying, the interest will become a smaller and smaller portion of the payment. Over time, your home becomes a savings account as you build equity.
The Security of Earning a Return on Your Investment
When people say they made money on their house, they’re really talking about return on investment. Investing wouldn’t exist without a return, so this is a major consideration whenever you plunk down hundreds of thousands of dollars. When you buy a house, you know that you’re putting money in something that has a market. If that market goes up, you’ve made money (also known as appreciation). Even if you don’t realize this return, it’s still there waiting for you. With an increased market value, you can buy a more expensive house in the future, or even use it to invest in revenue properties. It is your money and if it’s your primary residence, it’s tax free money to boot! Return on investment shouldn’t be the only consideration when buying a home, as it can take a long time for that return to show itself in a fluctuating real estate market. However, market history has shown that if you wait long enough, investing in a home is likely to pay off – and pay off big.
Market history has shown that if you wait long enough, investing in a home is likely to pay off – and pay off big
The Security of Having Collateral
When you own a home, people want your business. To a bank, you look like a responsible and wealthy individual. That isn’t to say that there aren’t many responsible and wealthy renters out there, but there’s nothing like a house to add some financial clout to your portfolio. When you have a mortgage, you have organized and regular payments, which will benefit your credit score. But you also have a large asset that is likely to grow. Lenders love that. Banks know you can borrow against your house more safely than if you didn’t have property, so you may even be able to get better rates on a car loan or a line of credit, or use your home equity as leverage to start a business. Although not everyone will leverage their home equity, owning a home does give you that option – and options are rarely a bad thing.
Pride of Ownership
When is that last time you felt proud of a rental car, or displayed a library book on your shelf? Owning something seems to give a person pride they wouldn’t normally have when renting. It must come from the appreciation and respect an owner has towards his or her home. It isn’t easy to save up for a down payment, choose a place to live and commit to monthly mortgage payments. You have to respect your home when you spend such a large portion of your income on it.
Whether you’re looking for real estate in Edmonton or elsewhere – it’s hard not to appreciate what your home does for you. It provides more control over how you live and it gives you financial options for the future. It also provides some financial security. When you look at it as a total package, it’s got to be one of the best places to put your money.
by +Alan F Macdonald REALTOR® | Copyright © – gimme-shelter.com
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