Should I rent or should I buy a home in Edmonton?
There are tons of real estate listings in Edmonton, and it can be exciting to start looking for your dream home. One of the most common questions people ask when moving is “should I rent or buy a home?” The answer isn’t a clear-cut yes or no - it depends both on your situation and what you’re looking for in a home. However, if you can afford to buy it almost always is a great option, especially with interest rates being as low as they are right now. Before making a decision, consider the following:
Can you see yourself living here for at least 5-10 years?
The first thing you should consider when deciding between buying or renting is how long you will be in the area. If you move around a lot, travel for work, or are young and just starting your career, are you ready for the long-term commitment of a mortgage? If you would still rather put your money towards your own property and not that of a landlord, are you able to decide to come out behind on your mortgage if you suddenly have to move? Would it stunt your professional development if you’re forced to stay and not take a job offer somewhere else? You should be comfortable with staying where you are for the long-haul when deciding whether to rent or buy.
Some could argue that they can sell the home in the case of a sudden move. While this is true, there are penalties for breaking your mortgage contract. Additionally, there are costs associated with selling, but if you choose to rent it out instead, a lot of these costs are countered (and you can make a large profit) if you are selective about where you purchase and what type of property you buy for investment purposes.
Consider what you’re investing in: your equity or someone else’s
Another thing to keep in mind are the costs associated with owning a home. If you are currently renting or living in your childhood home, you likely have not had to pay for any maintenance. However, once you buy a home, it is yours and any repairs would be your responsibility.
On the flip side, you can also see a home purchase as an investment opportunity, especially if you purchase a house with a separate entry for the basement. With a separate entry, you have the opportunity to rent it out as a legal basement suite, either to tenants or for use as an airbnb. This means that you can live in the home and also earn an income from it that can help pay for your mortgage. A source of passive income is never a bad thing, and while your mortgage may be higher than what you would pay as a renter, you are building up equity for yourself and not a landlord.
Property values can go up or down (but Edmonton has seen an overall upward trend)
In addition, the real estate market is unpredictable at times. Sometimes, property values go down for reasons that are beyond your control. This would not be a problem for a renter, who can wait for the end of their lease and find a new place if the current one is no longer appealing as renting is not a big commitment.
However, if the area your home is in becomes a lot more desirable due to new developments, you can flip your property and make a substantial profit. Generally, the Edmonton housing market has seen a steady rise over the years. While there have been some ups and downs, the ups have been a lot higher than the downs and the market has seen an overall upward trend. While investing in cryptocurrency or the stock market is quite volatile, a mortgage is one of the safest investments you can make.
What is important for you to have in a home?
Consider your financial goals, what kind of home you can afford, and what is important to you in a home. If you would love to have your own space that you can decorate as you please with paint or mounting, buying gives you that freedom. If you can see yourself staying in the same place for more than a few years, and if you want pets but don’t want to have to ask a landlord for permission, buying also allows you to do what you’d like. As well, the cost of renting can go up if the area you live in becomes more desirable, whereas the cost of a fixed-mortgage is stable. And, if you have a larger family and want more room, owning a home can make a lot more sense than paying a large amount of money to rent out a bigger space.
Purchasing a home is one of the biggest financial decisions you make and requires proper research in order to make the best decision. The team at NXT Realty Group would love to help you decide whether buying is the right choice for you. If you’re thinking about buying but aren’t sure, we’d love to speak with you and help you make the right decision (with no pressure to buy if the time isn’t right). We are an Edmonton-based real estate group that specializes in helping homebuyers and home sellers take the NXT step. If you would like help setting up a personalized home listing search in Edmonton and its surrounding areas, or if you’d simply like some insight on the Edmonton real estate market, please feel free to reach out to us using our contact form, or the message function on our website. We can also be contacted by email at email@example.com or by call/text at 587-855-0989.