Is home ownership for you? Maybe you always dreamed of building your own home or see yourself in a condo, living in or near the urban centre. Or perhaps you’ve always wanted to live in an older house in a well-established community and get to know the neighbours.
Renting is back in vogue again as well, and not just for students and the newly starting out set. After weighing their options, more and more people are deciding the flexibility of a rental situation fits their lifestyle—and their finances.
How to decide? Consider your answers to these six questions as a good starting point:
1. How soon do you think you’ll be moving again?
When thinking about the next few years of your life, ask yourself if there’s a good chance you will need to relocate. If you’re not sure what the future holds, due to potential shifts in your work or your family life, renting may make more sense. It simply allows for more ease in times of transition.
2.What can you afford?
Yes, you can buy a house with just a five or 10 per cent down payment, but you’re not leaving much of a buffer should your financial circumstances change. And don’t forget the closing fees and other costs that come with moving into a new home.
A financially responsible rule of thumb is that your mortgage and other associated housing costs should amount to about 30 per cent of your net household income (ideally less). More than that, and you could find that you have to make big lifestyle sacrifices to support your mortgage.
Don’t forget about house repairs and maintenance either! Even if you’ve decided to build your own home and rationalize that repairs are far off in the future, ongoing maintenance and other emergencies can happen. While renters have fixed monthly expenses and can just call the landlord when something breaks, homeowners can’t. Even in a condo situation, you need to factor in maintenance fees as part of your monthly housing costs.
3.How much does location matter to you?
Where you live can be as important as the actual living space. Often those who opt to build their own home choose to do so because they already have their ideal location in mind.
Some homebuyers may stretch themselves financially on a house if it’s in a preferred community or neighbourhood. In the city, renters can often have the edge with location as they may be able to afford to live in a more upscale or desirable neighbourhood than they could afford if they were buying a home. Renters can also choose a home closer to their workplace or on city transit routes to save on transportation costs and commuting time.
Questions To Ask When Buying Land
4.Do you know exactly what you want in a home?
A growing family, children moving away, aging parents, frequent guests, mobility issues, or a desire to “age in place” - all of these situations come with a specific set of criteria for what you need in a living space and will affect where you choose to live.
Other considerations, such as being able to paint and customize your home to your own style, and whether you would like outdoor space to garden and grow some of your own food may factor in as well. Again, don’t limit your thinking to your present situation, look ahead five to 10 years and think about how your needs may change.
5.How much does energy efficiency matter to you?
Newly built homes are more likely to be built to a higher energy efficiency standard than either an established home or a rental property. Yes, you can retrofit a home but it’s unlikely you will get the same results as you would from a house that is designed with energy efficiency in mind.
What Is An Energy Efficient Home?
6.How important is home ownership to you?
For many, home ownership represents something far beyond the physical property, bringing with it a feeling of stability and security and a sense of pride. If this sounds like you, you’re likely going to be one of the 68 per cent of Canadians who owns their own home. Renters, on the other hand, get to enjoy less responsibility, which can free up funds for other investments or travel.
Ultimately, there usually isn’t a clear choice. The most important thing is that you and your family weigh all the factors and figure out what works the best for you.
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6 Hidden Costs Of Building A New Home