Homeowners and renters have always debated what is best: buying or renting. Those passionate about either side tend to present their opinion as if it’s all or nothing. It can be challenging to get the correct information when there’s so much emotion tied to the topic. When considering renting or buying real estate in Hamilton, take a step back and consider the facts first.
Advantages of Homeownership
One of the most significant advantages of owning a home is building equity. When you purchase a home, you are investing in a property that will likely increase in value over time, based on historical data. As you make mortgage payments, you are paying down the debt you owe on the property, which means you are building equity in the property. Over time, this equity is an increasing asset that the homeowner can later use for various purposes, such as investing in another property or using it as a source of income in retirement.
Another advantage of owning a property is the potential to reduce taxes and house expenses. Depending on the type of mortgage you obtain, there are cases where the mortgage interest you pay on a property can be used as a deduction from your taxable income. If you rent out a property, you can deduct the interest paid on the mortgage. If you operate a business in your home, certain house-related expenses can be written off as business expenses as they are shared between the residence and the business. Understanding the whole picture and exploring your circumstances can help put the complete financial picture of owning a home into perspective.
When you own a home, you are free to make any changes you like within the parameters of zoning laws, condominium rules, and regulations within the community. You can also personalize your home’s interior and exterior to suit your lifestyle and tastes, which is important to many homeowners.
Advantages of Renting
One of the key advantages of renting is the flexibility that it offers. When you rent a home in Hamilton, you are not subject to a long-term commitment, and you can quickly move if your circumstances change. This can be essential for people who seek clarification about their long-term plans or who may need to move frequently for work or other reasons.
Another advantage of renting is that it requires a smaller upfront financial commitment. When you rent a home, it is common for the landlord to request payment for the first and last month’s rent, which is much less than the down payment required to purchase a home. Renting is an attractive option for people struggling to save for a down payment or not yet in a solid financial position.
How to Decide?
There are a few factors to consider when deciding to rent or buy and what is suitable for your lifestyle.
- Commitment. Can you see yourself living in the area for a long time, or are you in a stage where you’re unwilling (or unable) to make a total commitment?
- Employment. Are you settled in your career, or are you currently working at jobs that don’t have the stability you’d like? A guaranteed income of a certain number is an important factor in qualifying for a mortgage. As mentioned above, homeownership’s financial commitment goes beyond the initial purchase, and some jobs don’t offer the financial security that homeowners need.
- Affordability. Can you afford the down payment that is required for purchasing a home?
- Market Conditions. This varies, so working with a real estate expert will help you decide whether pursuing a rental property or moving forward to homeownership is the best decision for you at this time.
The best thing you can do when considering renting or buying in Hamilton is to consider all your options. Are your ideal properties on the market? What is your budget? What kind of mortgage are you pre-approved for with your lender? Reach out to a licensed Royal LePage Burloak REALTOR®, and they will walk you through your options and help you make the right decision for you!
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