Inflation rates have been slowing down in Canada. Despite that, residential rents keep rising and people are forced to cut down on essential expenses. That’s why most people are at a crossroads between buying and renting their homes.
There are several factors that affect the market and your personal situation. If you are looking to move to British Columbia and get closer to national parks, you may be exploring Okanagan homes for sale. Let’s figure out why buying a home is better than renting.Â
1. Rent will keep increasing
Renters in Canada know about the sharp rent hikes in the country. Overall rent prices have increased by around 11 percent in the last couple of years. When it comes to British Columbia, the rent hike has been more drastic at around 31 percent. Even if you can afford to pay rent for this year, you are dependent on the whims of the landlord. You always need to worry about irrational hikes and cut your expenses.
On the other hand, buying a home gives you a sense of security. You live in a home that’s yours and you’re free to do whatever you want with it. There’s no eviction notice hanging around your neck and your monthly expenses remain predictable. When you buy a home for sale in West Kelowna, you will have more freedom and fewer things to worry about.
2. Lower long-term cost of ownership
Mortgage payments are usually higher than monthly rent. That’s why most people develop the misconception that renting is cheaper than owning a home. However, in the long term, buying a home is cheaper than renting a property. For instance, you may be paying $2000 rent on a property in British Columbia and $2200 on the mortgage for a similar property.
However, your installments remain the same if you opt for a fixed-interest mortgage while the rent increases every year. Over 20 or 30 years, the cost of ownership is lower. Moreover, the mortgage goes into a fixed asset, something you truly own.
On the other hand, rent goes to the landlord for temporary residence. If you are looking to buy a house for sale in Okanagan Valley, Shorerise is a vibrant community that has single-family and multi-family homes to call yours. Your cost of ownership is further reduced with tax deductions from both the central and provincial governments.
3. You invest in an appreciating asset
When you pay rent, it becomes part of your living expenses. On the other hand, you invest in a highly valuable and appreciating asset with mortgage payments. Similar to rent prices, the values of homes are also increasing sharply in Canada. In the last decade, house prices rose by around 88 percent in Canada.
If you bought a home 10 years ago and paid off its mortgage, the home would be worth almost twice its original price. Homeownership increases your net worth and helps you build wealth that can be passed on to the next generation. Even if you decide to sell your home after paying the mortgage, you’ll be earning profits that can be used to buy another property.
4. Tweak or design your home Â
When you sign the lease agreement to your apartment it comes with a long list of conditions. You can’t make certain modifications to the property, pets aren’t allowed, and more such conditions that limit your freedom. Buying a home doesn’t come with such restrictions. You have all the decision-making power.
You can buy a new home and renovate it according to your specifications. There’s also the option to buy a lot and start from scratch to craft an Okanagan custom homes that aligns with your vision.
5. Earn passive income or take out a mortgage
When you become a homeowner, you can also earn passive income by renting out the property. You can even turn a room into an Air BnB and use that passive income to help with your mortgage payments. Apart from that, there’s also the option of taking out a second mortgage during emergencies. You can get a credit line for the accumulated equity on your home. Buying a home can help you save on rental costs, live on your own terms, achieve financial stability for you and your family and create beautiful memories together. Ditch the lease and look for the best mortgage rates to buy your dream home.