Blog by Andrew Peck

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Owning or Renting – What’s Your Best Option?

Owning or Renting – What’s Your Best Option?

Many renters I talk to say they would like to own their own home and quit paying someone else’s mortgage. Owning a home is their lifelong goal, but right now, they don’t know what to do.

Some of my clients want to buy their first home – a small condominium – and others already own and want to trade up.

But the continuous bad news we’re bombarded with by the media is making these buyers so cautious – they’re worried, waiting on the sidelines to see what happens with the economy.

All have secure jobs. Right now the unemployment rate in Metro Vancouver is 6%. That means for every 100 residents actively seeking work, six of them aren’t finding it. To make sure they do, the BC Government recently announced it would create 88,000 jobs to get us all working.

So, how does a potential buyer sitting on the sidelines decide to buy a home?

A good place to begin is by comparing renting and buying costs using the mortgage calculator on www.realtylink.org .Locate a property that might interest you, and then calculate your total mortgage costs. Compare this with what you are paying for rent.

As a short term option, renting may be preferable if your employment is not secure or if you plan to soon move to another city.

I encourage you to do the math. If you rent, you will pay rent that typically increases at the rate of inflation. This means your housing costs will never decrease, unless your landlord decides to decrease rents. As a renter you can’t recover any portion of your monthly housing costs (unless you have a home office and this is a legitimate tax deduction).

When you buy a home, your equity - the value of your home minus the debt you owe - increases every time you make a mortgage payment. Over the life of your mortgage, your equity grows until you own your home.

Right now, our economy is shaky as a result of complex global issues. Keep in mind though, locally our real estate market is still active. There is a large selection of properties on the market and sellers are motivated. We could be nearing the bottom of the market, which could make this a good time to buy your home.

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