Rent or buy your home? 4 things to consider


(NC) Arguments for each option constantly change depending on market conditions, government regulations and financial factors. Many don’t realize that there are actually some in-between options as well. To find the path that’s best for you, make sure you consider these factors which are often overlooked in the “traditional” debate.

Location, location, location. According to the National Bank of Canada, for the first time in years, it is officially cheaper to rent versus buy in Canada. This means that nationwide, average rent payments are lower than average mortgage payments. However, these costs vary widely from place to place. In some locations (especially seasonal hot-spots and tourist areas), rents can spike much higher. Make sure you look at mortgage and rental rates from your specific area and don’t let hype from other locations throw you off.

Know your long-term plan. Time is a big factor in the rent/buy decision. If you’re planning to stay put, buying is likely to be a good option. But if you know you’ll be moving around (or just aren’t sure), renting will likely offer you better flexibility and save you the costs (legal fees, agent fees, etc.) and headaches (staging and showing a home, transaction hiccups) of buying and selling.

Factor in the “hidden” costs. Taxes are inevitable, yet many people forget to factor them into their decision. A nice perk of renting is that you likely will not be responsible for property taxes, so won’t be caught off-guard by tax hikes. If you plan to buy, make sure you’ve researched tax rates in your area. They vary widely and can and have a huge impact on your monthly budget. Purchasing a house can sometimes trigger a tax reassessment, so don’t just go by what the previous owner paid. Make sure you’re prepared to pay tax on the sale price of your house. Also consider insurance and maintenance costs — tenant insurance is often less expensive than homeowner insurance, and owning a home means you’ll need to keep it in good shape.

Consider the “in-between” options. Although it currently has a low profile, land-lease homeownership is growing in popularity and offers a more affordable option for buying a home. In a land-lease arrangement, you purchase your home while leasing the land on which it sits. This provides the perks of owning a home (like home equity), while reducing the cost of your mortgage. Land-lease communities such as those offered by Parkbridge also tend to offer amenities and social activities that you likely won’t find with a rental.