For this particular blog, I thought I would touch on a question that usually gets asked countless times over and over- Should I rent or should I buy? It is a difficult question because you have to ask yourself some questions you may typically otherwise avoid. Here some arguments for and against.

Purchasing Your Property:

1. I always say, take emotion of the deal, look clearly; never let your emotions drive you; however we are still human. There is something about physically owing your house, a ‘right of passage’ if you will to adulthood or a new chapter of your life. This is not to say you don’t get this with renting, however, the down payment investment means you are committed to this next journey.
2. Building Equity: As you pay down the mortgage, you are building equity in your house, you are paying the bank back the borrowed amount. The idea behind this is if the house increases in value for example by $250,000 over the 25 years, you are only ever paying back the mortgage amount. In essence you could make a profit, which in a rental you will not have this opportunity.
3. Inflexibility: By owning your place, you are making a much longer-term investment, you own the house, if for example you need a bigger place, and your job relocates; with a rental you can usually (depending on the agreement) give 2-3 months’ notice and vacate, with minimal loss. In an owned place, you need to sell, contact a realtor, deal with the gain/loss on the disposition of assets etc., it is much more complicated process.

Renting Your Property:

1. The biggest and the most obvious is there is no down payment required, for owning a down-payment of a minimum of 5% or 10% depending on the value of the house is required to get a mortgage. In renting you are usually just paying a flat monthly fee, and one of three utility, usually just electricity.
2. Liquidity: Liquidity, however not in the traditional sense (liquidity typically refers to how fast you have the ability to sell assets for cash), I mean in the short-term you are free of obligations to a financial institution, banks have a lot more leverage than tenants to do force payment. You should always pay rent, but in the instance that you are being miss-treated or strongly feel you are being treated unfairly, tenants do have the right to appeal to the tenancy board and have more rights than you might have with a bank who can force foreclosure.
3. Credit: Owning a house and paying down a mortgage is one of the fastest ways to build your credit history, it allows for the banks to assess your ability to pay down a loan. The banks know owning a house is a big milestone, and therefore use a mortgage as one of the biggest ways to access credit. If you rent you aren’t building up your credit history.

In summary, it is up to you to decide whether or not you want to purchase your property or rent a property however the above mentioned arguments are definitely a good place to start! Always remember, the decision utterly lies with you as nobody but you will be you facing the consequences.