Should You Buy or Rent in 2022?

Owning your own home can be incredibly rewarding. Perhaps it’s something you’ve dreamed of for a long time. It’s one of the biggest financial decisions you’ll make and it’s important that you are well prepared for it. While owning may be on some people’s minds, there are others that prefer to rent.

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There are benefits and downsides to both aspects, however at the end of the day, it all boils down to what works best for you. If owning property or renting is something you’re looking into for 2022, here are some things to consider. Let’s decipher what to expect and the responsibilities for both buying and renting. 

Owning Property Benefits

When you own a home, you are building equity. It is an investment towards your future. The value of your home may appreciate overtime. You are also granted stability. You can choose to design/remodel your home to your liking, enjoy your privacy, and much more. 

Here are some things to consider beforehand… 
• What is your financial situation?
• Are you financially stable?
• Do you have pre-existing debt?
• How long do you plan on living there?
• Does it offer room for growth?
• Are you ready for commitment?
• Will you have enough extra money to live comfortably?
• Can you afford ongoing maintenance costs/taxes/insurance?

Downsides

There are bigger upfront costs when it comes to owning a home. You must take into consideration the down payment, closing costs, monthly payments, maintenance, taxes, and more. There’s also a risk that the property value could fall, but that’s a risk that many take when purchasing a home. Additional costs still apply even after you’ve paid off your mortgage. Things such as housing insurance, property taxes, and maintenance costs being a few. If you are determined and ready to purchase your first home, here are some useful guides and tools to help you along the way.

• CMHC Homebuying in Canada This homebuyers guide goes into everything you need to know to purchase a home in Canada. Everything from deciding whether homeownership is for you, financing, protecting your investment, and more.

• USA Gov. Housing Discover a variety of federal programs that may aid you in purchasing your home, understand the basics of mortgages, and more.

• Citizens Advice UK Housing Get information and services about buying a home, joint tenants, legal work of buying a home, and more.

• Mortgage Calculator UK This tool allows you to estimate your mortgage affordability based on your income. Easily determine your mortgage amount, interest rates, total costs, and more. This site is unique as it also offers graphs of loan repayment along with monthly/yearly amortization tables. In addition, they offer different types of calculators. Their mortgage affordability calculator is a great place to start. 

Renting Property Benefits

Buying a home is not for everyone. Perhaps you are struggling with job stability, finances, or maybe you just don’t like staying in one place for long. Renting is a flexible option and the costs are much lower in comparison to owning a home. There’s little to no maintenance costs involved. You are also free to spend/invest your income however you’d like.

Downsides

When you are renting, you are not building equity. Your monthly payments do not go towards owning property. All decisions are made by the landlord including rent costs/spikes, how you design/decorate, if pets are allowed, and more. You aren’t guaranteed stability and could be asked to relocate with little notice. When it comes to owning, once the home is paid off you no longer need to worry about mortgage payments. Whereas with renting, there will always be monthly costs. If renting is the option that fits your needs, consider visiting these helpful resources.  

• CMHC Renting a Home This renters guide touches on everything you need to know as a tenant. Learn about your rights, responsibilities, and rental practices across the country. 

• Gov. UK The Checklist for Renting in England A helpful checklist on what to expect and prepare for when renting. Understand your rights, the difference between renting either directly through a landlord/agency, fees, and more.

Now that we have a general understanding for buying vs. renting, what is the next move? It all comes down to your personal goals. For some, owning is just not important. They don’t expect to stay in one place/city/country for long and so renting works out better for them. While others prefer to lay down roots and stay in one place for retirement. Do you have a preference? Do you have experience with both? I’d love to hear your thoughts.