So, you’re looking at moving and you’re not sure if renting or owning a local Calgary AB home is right for you?
You’re not sure if one is a better financial decision than the other?
You’re not sure if you’ll be able to find the type of house or apartment you’d like to live in?
You’re not sure what you can handle financially?
Well this article will dive into ways you can learn how to know if renting or owning a home is right for you in the Calgary area.
How To Know If Renting Or Owning A Calgary Home Is The Right Choice
Throughout the 1950’s-1990’s, home ownership was a major goal of most families across Canada. Owning a home was the “Canadian Dream” and if you didn’t own your house there was almost this stigma that went with that.
But, that rule has changed in recent years. The economic downturn paired with the bursting of the housing bubble makes renting an attractive option for many Albertans… maybe even you.
In the past, the choice to rent or own here in Calgary was about whether you’d prefer to live in a house or an apartment. Now, there are opportunities to purchase apartments / condos and rent homes, so there are options for renters or perspective owners to live in whatever type of property that they’d prefer.
Renting is great for people who want flexibility. Perhaps you’re just starting your career, and you’d like to be able to relocate quickly. Renting is a wonderful option for people who like to “try out” various neighborhoods in their city before finding a place to settle down.
Owning a home ties you to one location for a good period of time. It would destroy your credit to step away from your mortgage, and selling your home is a long, arduous process that could end in you losing some of your initial investment.
In many cases, contrary to popular opinion, it can be more cost-effective to own rather than rent, especially in Alberta where home prices have increased 3.5% a year for the last 70 years. While renters never have anything to show for after years of living in a property, that is not the outcome of a homeowner.
It’s not always best to rent for other reasons… Owning a home is still the Canadian dream. You have the right to paint, decorate, and reconfigure your house however you’d like, without the worry of risking your security deposit or upsetting your landlord. It’s the ultimate in freedom when it comes to your house.
Homeownership as an investment. While the housing market has rebounded here locally in Calgary AB… the home values aren’t increasing like they were during the build up of the housing bubble (which is a great thing actually)… but another benefit of home ownership is homeowners typically enjoy the potential appreciation of the value of their home.
From 1968-2004, home values grew by approximately 3.5% annually, outpacing inflation (as well as many stocks & other financial instruments). As well when homeowners pay their mortgage down rather than paying rent, you can achieve 10% a year compounded financial growth by simply owning a home.
As a homeowner with a fixed rate mortgage, you enjoy the benefit of inflation protection. For example, if your mortgage payment is $1,300 each month, you’ll pay that for the duration of your loan. However, the purchasing power of $1,300 can change significantly over the course of 15, 20, or 30 years. As most people’s income grows over time, a fixed- rate mortgage can eat less and less of your take-home pay each month.
There are many factors to consider when deciding whether to purchase or rent your next home. The key is doing exactly what you’re doing now… learning how to know if renting or owning a home is right for you.
The most important thing is to not take on any payments that you cannot reasonably expect to pay for the entire term of the agreement, whether it be a $900 monthly rent twelve months, or a $850 monthly mortgage for the next 15 years.
Have You Considered A Calgary Percentage Ownership Home?
There is another “hybrid” option to just renting or buying a house.
If you would love to own your own house in our area… and…
- You’re not able to get a home loan to purchase a house right now due to you don’t have the down deposit or for various financial reasons such as your self employed
… percentage owning a local house may be right for you!
Check out the percentage ownership process here on this website and if you want to get on our list to see Percentage Ownership Homes… head over here to see available percentage ownership homes here in Calgary.
See our latest percentage ownership homes by going through the link below!