7 Key Reasons Why Owning a Home is Beneficial
Calgary’s real estate market has had its fair share of ups and downs over the past several decades. As a first time home buyer looking to make the jump from renting to owning, you might be wondering when exactly is the best time to buy….
Will the market go up …?
Will the market go down…?
No one really knows for certain. However, factors that contribute to the direction of the real estate market and the overall economic health of Calgary’s economy should each be considered in their own respect.
Regardless of current market conditions, the question remains: should you rent or own? Here are some reasons as to why owning a home is much more beneficial than renting.
#1 – Be Your Own Landlord
As a first-time home buyer, you will have the security knowing that only the bank can kick you out of your home if you don’t pay your mortgage.
In a rental scenario, landlords can be much less dependable, who could decide to sell (at which point you could have people coming in your home every day to look at it), renovate, raise your rent or sometimes actually move in themselves.
Owning provides the peace of mind and security knowing you control where you live and no one can take that away from you!
#2 – Build Equity
What you pay towards the principal on your mortgage (monthly or bi-weekly) increases your equity in the home.
Wouldn’t you rather become a first-time home buyer and pay yourself first!? Your home acts like a piggy-bank by ‘saving’ the amount of principal you pay off your mortgage with each and every payment.
Then over the years, as the value of the house increases, your equity also increases. When renting, all the money you pay to your landlord is his or hers, providing you with ZERO benefit.
#3 – Build Wealth
Yes, Calgary’s real estate market will have its ups and downs, but if history is any indication of the future, prices should stabilize and rise like they have throughout history. Yes, it’s possible that home prices will fall but it’s also possible that your RRSP will lose value as well, as with any other financial investments you’ve made.
A significant difference between an RRSP / TFSA and owning a home is that they don’t provide any material physical benefit to your day to day life. Your account statements will have numbers on them, but even then, your investment accounts are still only a “paper gain” until you sell and put the money in your bank account.
Ultimately, the benefit of owning a home is building wealth while providing for all your basic needs.
If you own a property as your main residence and the value of the home goes up from what you paid for it, after you lived in it for a couple years when you sell you keep that gain, tax free (Always check with your accountant for specific financial advice).
Capital gains taxes are not applicable on the sale of your principal residence, another distinct advantage to owning your own home.
If and when you make the decision to become a first-time home buyer, this is another one of the many benefits!
#5 – Retirement
Mortgage rates can go up and down, but generally are quite reasonable and over time you will pay off that mortgage. That, coupled with long term price appreciation, can provide you with a nice nest egg for your retirement.
Almost all retirement scenarios assume you own your own home with no mortgage. Home ownership is a pillar of retirement for many Canadians.
#6 – Pride of Ownership
When you own your own home, it gives you the pride in saying the home is yours. That also means you can paint, renovate and customize it anyway you like.
If you want to build a solarium, then build it. If you want to paint the bedroom in a lovely zebra print, do it. If you want to turn the basement into a theatre room, you can do that too!
You can do whatever you want because you own it, It’s your property. No landlord, no asking for permission, nothing!
If you’re a condo owner, obviously you must follow bylaw rules and typically need permission from the condo board to go through with interior renovations. However, it’s still your choice to do so and not someone else’s!
#7 – Your Basic Needs
Owning a home gives you the ability to care for your family, provide for all of your basic needs and live a comfortable life.
Yes, renting does provide shelter, but you don’t control where you live or own the roof that is over top of your family at night.
Another unwanted scenario… what if the house is sold and your kids have to switch schools? These are all things to think about when considering the advantages of owning versus renting.
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