To Rent or To Buy

Right now Calgary is in a very strong buyers market. There is a lot of inventory on the market and not a lot of people in a financial position to purchase that inventory. Buying and renting prices have all gone down as sellers are adjusting to the current economic conditions.

While many believed that Calgary’s economy would recover quickly as it has in the past, they have been wrong and we are still scrambling out from the pit that the fall of oil caused. However, the one bright spot of this situation is that those looking for housing are in a great position to negotiate lower prices than Calgary has seen in a very long time. The window of opportunity will not last forever, so now is the time to make a choice.

With conditions so good, people are faced with two options: buy or rent. For some the choice is easy: they can either afford to purchase a property or they can’t so they choose to rent instead. However, in some cases people are on the cusp of either signing a new long-term lease to secure a lower rent rate in these conditions or making a down payment on a home and beginning to pay a mortgage. What are the pros and cons to each decision? Read on so you can make an informed decision about something that will have a massive impact on your future (no pressure).

Pros to Buying Your Own Property:

  • You get to start building up good credit by making monthly mortgage payments.

  • You are investing in something long-term that one day you can sell to get your money back (plus more, potentially).

  • When you own your property you can paint, renovate, and re-design things however you like.

  • You will know exactly what your payments each month will be and you are in control of what happens and how long you stay.

Cons to Buying Your Own Property:

  • It is a long term investment so you need to be absolutely positive it is the property for you.

  • There is a potential for you to loose a significant amount of money if you can’t pay off your mortgage or if when you do decide to sell your property the value has decreased significantly.

  • You are 100% responsible for any damage to it or for anything that breaks down.

  • Upkeep of a property is much more complicated than a rental suite.

Pros to Renting A Property:

  • You are only tied down to the property for as long as you choose to sign a lease for.

  • If anything breaks down that is not because of you, the landlord is responsible for fixing it.

  • Rent is typically much cheaper than paying a monthly mortgage.

  • You can negotiate prices and terms of a lease depending on the market conditions.

Cons to Renting a Property:

  • You are not building up any credit or equity.

  • You could be evicted if you break contract and will be held responsible for funds leftover to pay or expenses incurred.

  • You typically are not allowed to renovate as you wish. You need to have your landlords permission to make any major changes.

  • Increases the number of years until you could have a paid-off property.

This decision to rent or buy is an important one so choose wisely!

Your Real Estate Professional,

Ken Richter

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