If you're currently renting in the Vancouver area or Fraser Valley you're probably looking at the skyrocketing price of rent and increase of home prices and wondering if it makes sense to step into the housing market?
Although there is a lot of press about Vancouver being an unaffordable city, there are still plenty of good options available for a first time buyer to get into the condo and townhouse market affordably especially in the Fraser Valley.
While, there is no ONE answer for everyone in the rent/buy debate there are some questions you can ask yourself to see if it is right for you!
Take a peak at this infographic below to see which is right for you!
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On Opportunity Cost
The dilemma of buying versus renting comes down to the problem of opportunity cost, or what benefits you would be giving up if you picked one choice over the other. Consider your own unique circumstances, and the impact of either option on your future financial prospects.
Buy if… the property costs no more than 2.5 times your salary and if you can keep up with the annual property tax.
Rent if… the monthly fees are expected to stay low over a long period of time, and in the case of condos – if you can keep up with the association dues/fees.
Buy if… you current income can cover a mortgage down payment of at least 20%.
Rent if… the cost of buying wipes out all your savings on the house alone.
Your Net Worth
Buy if… you have a robust investment portfolio, or supplementary income to complement your first home purchase.
Rent if… you have fewer opportunities for additional income outside of your day job.
Buy if… you have enough cash to cover costs like property taxes, realtor transaction fees, and new furnishings.
Rent if… you would rather hand over the costs of regular upkeep to a landlord or property manager.
Timing is Everything
Conventional wisdom dictates that the sooner you can own a home, the better. In some situations, however, renting makes more financial sense in the long term. The money you saved from renting instead of buying can be used to grow your investments or set up a new income stream.
Length of Stay
Buy if… you plan to build a long-term home in the area with your family.
Rent if… you intend to live in the same place for just four to five years at most.
Buy if… you want full control over your home’s looks, interiors, and comfort levels. This is your option if you want to design your own space to your liking.
Rent if.. you’re more interested in a living space with just the basic necessities while you’re at work.
Duties and Responsibilities
Buy if… you see yourself as a proactive homeowner willing to learn basic repairs. This is anything from plumbing to electrical repairs.
Rent if… you are inexperienced in absorbing the financial risks of homeownership.
Buy if… you are well-versed in the area you’re planning to occupy. Consider this option if living outside the city center won’t be inconvenient.
Rent if… you are a newcomer unfamiliar with the surrounding streets and towns, or prefer living in the center of the city.
City vs. Country Living
Property values vary depending on whether you’re living in an urban or rural setting. Expect both rent and sale prices to skyrocket in the metropolis, especially a high-demand location near a major business district.
Buy if… you value your privacy and personal comfort above other considerations.
Rent if… you don’t mind the hustle and bustle of sharing a building with other tenants.