You've heard these statements, right?
"I'm sick of throwing money away on rent."
"Buying is always better than renting."
"Your home is your biggest investment."
Let's chat about the rent vs buy dilemma using logic, math, and reason, rather than ill-informed clichés. Then look at it from a purely lifestyle and happiness point of view.
Before we jump in, let's establish a few premises:
I'm talking about your primary residence (the place where you sleep).
This is not about real estate investing.
An average house in Alberta is $390,615. If you save up $20,000 for a 5% down payment your monthly expenses will be more than $2127.00 per month including property taxes, insurance, and mortgage insurance, but not including utilities. It will cost 1% annually for maintenance, so add another $326 per month. Owning an average home costs $2453.00 Per month. As long as interest rates stay low.
Is your house an asset or a liability? Is it taking money out of your pocket or putting it in?
If I buy an investment property for the same price the bank makes me put $80,000 down and I need to add 2 more expenses. Property Management and a Budget for Vacancies.
My monthly cost is $2037 per month for the same average house as long as I don't get stuck paying for someone else's damage to the property.
The math reveals that renting is $416. Less expensive per month or $4992 annually.
That's the math on an average home. Maby a smaller one makes sense for you. If you don't plan on paying down the mortgage for more than 7 years. You likely are just renting your home from the bank.
Don't forget that selling has a high cost too. Not to mention the cost of moving.
Being in a position to make lifestyle decisions not based on money but rather the pursuit of happiness is, a wonderful way to approach life.
Jason Fieber of MR. FREE AT 33 finds that when he thinks not about money when he makes decisions but instead about whether or not something makes him happy. And it just so happens that what makes him happy doesn't cost very much money.
It's an incredibly virtuous cycle that's part of an overarching holistic lifestyle that feeds into itself. Once you open your eyes to it, it's almost like you can't help but succeed, become financially free, and live life on your terms.
Read his blog It's Not About The Money: Rent vs Buy by clicking this link
Here is a fun video that brings up many more valid issues for your consideration.
At Avail Properties we have customers, not tenants.
We offer numerous payment methods and we accept pets wherever possible.
Our properties are new or renovated and our home maintenance and repair specialists take a proactive approach to minimize interruption.
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