The age-old question about whether you should rent or buy is definitely not new. Clients ask on a regular basis if we think it’s a good time to buy or if they should keep renting. In the past 5 years in Calgary, we’ve seen reasonable vacancy rates and market rents have been affordable. Because of this, finding a great accommodation to rent hasn’t been a difficult task in Calgary and lots of newcomers to the city have chosen to rent instead of buy. But, the question to ask is, “What is the best for your long term financial goals?”. Investing into real estate is always a great investment. So today lets chat about whether You Rent Or Buy In Today’s Calgary Housing Market?
Let’s look at the numbers. Renting may seem like the better option but let’s break the numbers down. To rent a single family home, worth approximately $400,000, clients are likely to pay approximately $2000 per month or $24,000 per year. Over 4 years the clients will have paid nearly $100,000 in rent. Now if you buy that same house over those same 4 years of owning a property, clients would also spend $100,000 but they pay down $50,000 of the principal balance of the mortgage. This means that they’ve built $50,000 of equity in their new home, and on the other side renters gained nothing other than padding the pockets of your landlord.
However with this being said there are other things to consider. By renting you don’t have to pay for home maintenance or property taxes. Renting also makes it easier to move. If you haven’t figured out where you put down roots, your going to school or your job has you traveling a lot you may not want to buy.
On the other hand, when you buy a home you are investing that money. Every time you pay your mortgage that money pays off some of your house debt and in turn you’re basically saving that amount. Unless you sell in a terrible down market chances are you will get that money and then some back out when you sell. The other thing about owning the home is you can rent it out and make some money. Being a landlord isn’t for everyone but there are many people that invest into the housing market and rent those homes out as their main source of income.
Either way there are pros and cons to each, and the decision has to be right for you. However when you do decide to take the plunge to buy I want to help you through the process. Have questions about whether you Should You Rent Or Buy In Today’s Calgary Housing Market? ? Give me a shout!
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