As Winnipeg's best realty team, we've heard the question “should I rent or should I buy” a lot. It's a question that everyone asks themselves at some point. For some, it’s when they’re young: crossing over to adulthood, trying to make sense of their future. For others, it’s when they’re mature: they’ve already purchased a house and are in the position where they have to again. There are several situations in between as well. So, why should you choose to buy?
With a mortgage, every monthly payment is helping you build equity in your home. While some of your mortgage payment goes toward paying the interest on your loan, the rest is paying off your mortgage principal. Home equity is a useful indicator of the distribution of your wealth, but it’s most often used when it comes to borrowing money. If you require a loan and are renting, you have a lower chance of getting approved.
The Government of Canada offers two tax credits for specific types of homebuyers. The first is, Home Buyers Amount; first-time homebuyers can receive a tax credit of up to $750. The second is, GST/HST New Housing Rebate; you can recover some of the GST or federal portion of the HST paid for a new or substantially renovated house, but conditions apply.
When you’re renting, you’re tied to a lease which usually has a long list of rules and regulations. Some of the rules/regulations are about the structure: no painting, hanging artwork, etc. Other rules apply to lifestyles: no noise after 10 pm, no pets, no smoking, etc. If you own a home, you’re not tied to these regulations. Even when purchasing a condo, you have more lifestyle and creative freedom. As Winnipeg's best realty team, we've heard a lot of people say that this is their main reason for choosing to buy.
If your home increases in value, you will pocket the additional home equity and realize the capital gains if you choose to sell (minus capital gains tax). The general rule is to hold onto a property for five years or longer to reap the full benefit of the home appreciation.
With all the benefits that come along with buying a home, you owe it to yourself to answer the question, "should I rent or should I buy?". Think about speaking to a professional who can steer you in the right direction and let you know whether it's financially feasible for you to purchase a home right now. If you have any more questions, you can always reach out to us here at the Ed Dale Team. AKA, Winnipeg's Best Realty Team.