Renting vs Owning Real Estate
Renting vs owning real estate and why you should think about making the transition!
Buying a property can be scary, overwhelming, and seem impossible, especially in an expensive city like Vancouver. However, with the right strategy and team behind you, there are tangible steps you can take TODAY to join the homeowners club! First things first, let’s look at owning vs renting.
Renting – A Break Down
Of course, there is a certain upside to renting. It’s much easier to move, can be a cheaper monthly payment, in some cases, and allows you the liquidity to invest in other products like stocks, bonds, mutual funds, crypto or NFT’s. Let’s break the numbers down. Here’s what renting could cost you:
Say you’re rent costs $2,500 per month, which is between the 1 BED and 2 BED apartment rental averages in Vancouver.
That would mean you are paying $30,000 per year towards rent!
1 year = $30,000
3 years: $90,000
5 years: $150,000!!!
Suddenly, that seems far scarier. Not only are you spending that money paying someone else’s mortgage, you’re missing out on huge appreciation opportunities. Within the past couple of years, we’ve seen clients’ properties appreciate $150,000 in a matter of months. Additionally, homeowners are paying down their mortgage each month, so they’re seeing tremendous financial growth.
We’ve met numerous clients throughout our careers that are incredibly comfortable in their rentals. Which is totally fair! We won’t discredit wherever feels like home to you, and we recognize that some people are in an ideal rental situation. However if you want to start building long term wealth through real estate, consider purchasing an investment property that you can rent out or a presale that only requires a deposit until completion. These steps will help you enter the market and set you up for future success. Here are a few options to consider:
If you’re looking for a property for yourself there are many upsides to owning vs renting. Firstly, you can customize the property to meet your unique style! You will build equity and your monthly payments go directly towards your asset, not someone else’s. You can have 100% security knowing that you can’t be served notice to leave.
Purchasing an investment property
If you need a 3 bedroom for your family but can only afford to buy a 1 bedroom in your desired area, consider an investment property. This will help you enter the market without sacrificing the space you require. With escalating rental prices we’re seeing rents covering, and in some cases exceeding, monthly mortgage payments. That way you are still building equity to help solidify your financial freedom.
Purchasing a Presale
We’ve seen more and more people tend towards presale in recent years. There have been tremendous opportunities in the market to lock in a presale investment by paying a deposit of around 10-15% +/- and watching the property value increase throughout the years the development is being built. Owners have the choice to assign their contract, buy and rent out, or buy and live in. It allows for additional options and time to arrange funds.
Climbing the property ladder should be on each and every person’s radar! When looking at renting vs owning real estate, there are ample benefits to focusing on the latter. If you’re interested in learning more, the first step is to get in touch with us. We will set you up with our team of trusted referrals to make sure that you’re set up for success!
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