You may have heard the age old adage that “whether you rent or own, you’re paying for someone’s home” and it’s true, so why wouldn’t you want to be paying for your own home?
Buying in today’s market, especially in the Okanagan is no small feat, BUT if it’s on your bucket list for 2023, here are a few words of encouragement that may help give some perspective to the 6-of-one-half-a-dozen-of-the-other conundrum of renting vs buying.
Reason #1 to consider buying your own home (please read the caveat**):
1. FINANCIAL AND HOUSING STABILITY
Home ownership is one of the most important elements of building financial security and gaining equity over the course of time. High rental costs, on the other hand, can trap you into the endless cycle of paying rent, and dealing with increasing rent beyond your control. Not to mention the ever-pending risk of finding yourself displaced by a landlord who suddenly changes their mind about you renting their property even though they promised that they wouldn’t. In BC, the rules/laws are perpetually growing in favor of tenants and their right to remain in homes, but if you’re sitting in a month to month rental, you could receive a notice to vacate at any moment (only with correct/legal cause, of course!). Breaking away from the rental trap enables you to achieve greater financial security and perhaps some piece of mind too. Buying a home, however, is not for everyone, despite how much I love the idea of long term investment that, historically, has always been known to grow and gain with time.
**So who shouldn’t be buying a home right now? Well, that would be anyone who would potentially find themselves strapped for cash and house poor at the end of the day. If getting into a home means that you and/or your family will be struggling to buy groceries, be spending every night after you put the kids to bed sitting at the kitchen table pulling your hair out to figure out how to make ends meet, then perhaps the time to buy a home is not now, but maybe 6 months or a year or two years down the road when you’re in a position where the monthly cost of carrying a mortgage and property taxes won’t make you have to choose between groceries or gas or only a little bit of both.
Reason #2 to consider buying your own home (please read the caveat**):
2. BUILD EQUITY
Have you ever heard of the saying, “Either way you pay a mortgage.”? Many people are afraid of having a mortgage, but you need to realize that whether you own or rent, YOU ARE ALWAYS PAYING SOMEONE’S MORTGAGE. Perhaps having someone build a financial empire on your hard-earned dime doesn’t leave you feeling uncomfortable, but, wouldn’t you rather have your money go into something that builds financial security and equity for you? Owning property is the key – for most people, their home is the greatest investment they ever make. Homeownership is an opportunity to put your money in a safe long term investment where it is likely to grow.
**Here’s the part that helps with the “I don’t want to be part of the system” mentality… you’re still paying, right? So how about this, you buy a place that has an income generator in it, whether that be a suite that you rent out all the time (we always need more long term housing in BC!), or a roommate that you share the space with (if you pick wisely, this could be the most amazing friendship you ever have and isn’t it nice to have someone to chit chat with to break up the humdrum of your own routine?), a spare room that you AirB&B occasionally for a little cash-injection into your fun-fund, or heck, why not AirB&B your entire place while you go on holiday? For each one of these options, you’d have someone else helping paying YOUR mortgage and you either get a reduced monthly cost (plus long term equity gains) or you might even live for free! Now, you can’t tell me that you don’t want to live with ZERO monthly housing costs, can you?
Reason #3 to consider buying your own home:
3. INTEREST RATES
I know what you’re thinking… Justina, there’s NOTHING positive or enticing about interest rates in 2023 that makes buying a house affordable or cheap! And to that, I have to say, I agree. The seven (that’s right, 7!) interest rate hikes that we saw in 2022 and the one so far in 2023 are certainly not elating for buyers, HOWEVER, there is a bright side; they will come down… eventually! Traditionally, 10% was a fantastic interest rate. Although higher than the historically low rates of the past few years and despite recent shifts upward, interest rates continue to hover below the historically “good” rates. You can still get a 5 year fixed mortgage with a 4.44% interest rate* as of February 5, 2023. While this isn’t news worth jumping for, there is a ray of hope on the horizon as the Bank of Canada has indicated that it intends to hold it’s rate for a while now and perhaps will even begin to decrease in the second half/last quarter of the year. One can only hope that this holds true!
The moral of the story here is that homeownership enables you to gain financial stability, have a space to build and grow yourself and a family and build equity in a nest egg that holds the power to be a massive golden egg if you wait a while to allow the gains to grow. Let me help you tap into the powerful financial reasons for buying a home today and make the dream of homeownership in the Okanagan a reality for you and your family!
Justina LeeStolz PREC
*Interest rate information pulled from https://www.ratehub.ca/best-mortgage-rates