Buying > Renting
Owning doesn't make sense for everyone. Everybody's situation is different, but I would like to touch on the debate between buying and renting and both the pros and cons. As a 24 year-old in Real Estate I have this discussion with a lot of people my age. Most people close to my age are finishing up school, starting their first jobs, settling into a routine and starting to save some money.
Maybe I am a little biased as I do sell houses for a living BUT I have some valid points as to why buying is a lot better than renting. I do understand that saving for a down payment (5% of sale price) is hard and takes some time to build up, but in the long run that money goes towards an investment for your future. When you are renting, you are giving your money away to someone else. You will never get that $1,000 dollars a month ($12,000) a year back. I am using $1,000 as an example. Some people may pay more or less. On top of that you pay for someone else's heat and hydro costs.
I wouldn't expect a 24 year-old to be able to afford a house/condo in downtown Toronto. Depending on where you live, it would be in your best interest to rent rather than buy. Renting also represents mobility. If you like to travel, or move frequently for job opportunities, renting may be an easy way out. For the most part, tenants don't have to worry about problems that arise in the home such as the furnace breaking down, or the shingles needing to be replaced. People like the idea of not having to worry about paying for such expenses. Renting is, for the most part, easy living.
Now lets look at it another way. Those old shingles, or that 25 year-old furnace that you finally have to replace could work out in your favour. That money that you spend on the house for shingles will positively help the value of your home. A furnace today as opposed to a furnace 25 years ago is much more energy efficient. A new furnace might actually help lower your utility costs in the long run and also looks good to potential Buyers if you were to sell your home in the future.
Equity = the number one reason (in my opinion) to buy vs. rent. Every mortgage payment you make, increases your degree in ownership on the home. If interest rates drop, you have the opportunity to refinance your mortgage at a more desirable rate. Have you ever heard of a landlord dropping the rent? Probably not. Those people who may be able to pay for a home without a mortgage, can then use that money they have invested in the home for major purchases such as their children's education or even an investment property!
Lastly, you just have more freedom to do what you please when you own a home as oppose to rent it. Love pictures? You can hammer in as many nails as you want! Don't like a wall? Take it down! Want to change the paint colour? Flooring? Trim? I think you get my point.
If you are renting right now then set some money aside and start saving for a down payment! Found your dream home but you are not sure if you can afford it? Talk to me! I will walk you through the process of home buying and refer you to people who will break down the costs. Interest rates are low right now, I think you would be surprised at how affordable home ownership really is.