Housing Options

Should I Rent or Should I Buy?

Kathy McWilliam Housing Options April 5, 2018 Leave a reply

The common old ‘saw’ is that when you pay your landlord’s mortgage, your landlord’s equity increases and you have nothing to show for it.

In a perfectly predictable future that would be true, in most situations. We have seen, however, that property prices and the cost of financing can vary, sometimes wildly. People have been burned, yes they have, and the reputation of home ownership as the safest of investment bets has taken a bit of a beating.

So let’s look at home ownership for you as an investment and compare it to renting. We’ll assume that you are equipped for either scenario – you have access to funds for a down-payment, closing costs, home ownership costs like taxes, insurance, maintenance and on-going utilities costs. You are equally able to pay rent and/or condo fees, parking, utilities, damage deposit, first/last month’s rent for a unit in your desired location.

The money you use for a down-payment on your own home is very much a direct contribution towards your home equity, and seen that way, the larger the down-payment, the better. The money you use for deposits (damage deposit, first/last month’s rent) on a rental unit can garner you some interest earnings and the longer you remain in the rental unit, the more interest you will accumulate. That assumes you will not incur any major damage expenses over the period of your lease, of course.

What of your periodic rent or mortgage payments? It is obvious that the rent you pay a landlord improves his/her equity position and rental earnings (providing he/she charges the right rent).  What you get in return is freedom from responsibility for home-related expenses. You also have the opportunity to invest your savings in other ways: stocks, bonds, etc.

So given that renting has many advantages, especially for the foot-loose and fancy-free, why is home ownership still the holy grail for millions? What is its’ continuing allure even among folks who refer to homes as ‘money pits’?

First, there is the common-sense response that ‘I have to pay to live somewhere – why not pay myself? Because once your mortgage is paid off, the asset is yours. And during the mortgage period, you are able to experience the home as if it were yours alone already, to renovate, to improve, to sell, to enjoy.

The common old ‘saw’ is that when you pay your landlord’s mortgage, your landlord’s equity increases and you have nothing to show for it.

In a perfectly predictable future that would be true, in most situations. We have seen, however, that property prices and the cost of financing can vary, sometimes wildly. People have been burned, yes they have, and the reputation of home ownership as the safest of investment bets has taken a bit of a beating.

So let’s look at home ownership for you as an investment and compare it to renting. We’ll assume that you are equipped for either scenario – you have access to funds for a down-payment, closing costs, home ownership costs like taxes, insurance, maintenance and on-going utilities costs. You are equally able to pay rent and/or condo fees, parking, utilities, damage deposit, first/last month’s rent for a unit in your desired location.

The money you use for a down-payment on your own home is very much a direct contribution towards your home equity, and seen that way, the larger the down-payment, the better. The money you use for deposits (damage deposit, first/last month’s rent) on a rental unit can garner you some interest earnings and the longer you remain in the rental unit, the more interest you will accumulate. That assumes you will not incur any major damage expenses over the period of your lease, of course.

What of your periodic rent or mortgage payments? It is obvious that the rent you pay a landlord improves his/her equity position and rental earnings (providing he/she charges the right rent).  What you get in return is freedom from responsibility for home-related expenses. You also have the opportunity to invest your savings in other ways: stocks, bonds, etc.

So given that renting has many advantages, especially for the foot-loose and fancy-free, why is home ownership still the holy grail for millions? What is its’ continuing allure even among folks who refer to homes as ‘money pits’?

First, there is the common-sense response that ‘I have to pay to live somewhere – why not pay myself? Because once your mortgage is paid off, the asset is yours. And during the mortgage period, you are able to experience the home as if it were yours alone already, to renovate, to improve, to sell, to enjoy.

There is the emotional tug towards home ownership, a desire to have a patch of earth, a stable base.

Third, home ownership is attractive as the kind of investment that, though ponderously slow in its’ process, is pretty much effortless. You can tweak it from time to time, for instance, by changing from a monthly to a bi-weekly payment schedule you can chop a year or two off the length of the mortgage. Then, at the end of the mortgage, you have something you can convert to an income-generating asset of another type, or simply live mortgage-free. The only questionable aspect is what the future value of the home will be at mortgage end.

Second, there is the emotional tug towards home ownership, a desire to have a patch of earth, a stable base. This often comes with parenthood, but you don’t have to be a mama to be emotionally drawn to the idea of putting down roots that include your own tree, in your own yard.

Third, home ownership is attractive as the kind of investment that, though ponderously slow in its’ process, is pretty much effortless. You can tweak it from time to time, for instance, by changing from a monthly to a bi-weekly payment schedule you can chop a year or two off the length of the mortgage. Then, at the end of the mortgage, you have something you can convert to an income-generating asset of another type, or simply live mortgage-free. The only questionable aspect is what the future value of the home will be at mortgage end.

Most people can live with that level of uncertainty.

Your soocasa Platform Tools – an Overview

Kathy McWilliam Housing Options, Tenant Buyers March 19, 2018 Leave a reply

 

After you have signed up for membership at any level and have your unique log-in credentials, you will notice a new look when you log-in. Here’s what the home page looks like:

 

 

The website becomes your own work-horse of a platform, where you

  • ANALYSE your real estate deals
  • CREATE your savings and property goals
  • DRIVE your savings with purpose and accountability all the way to closing day

What If You Hate Math?

No need to feel intimidated – those math operations that produce your monthly savings amount?  They’re automatic when you fill in the forms correctly  You will have to do some research though, to find accurate and up-to-date information to put in the forms!

Where Are the Help Files?

There is a User Manual in the ‘Help Desk’ menu – you can access it before, during and/or after you decide to experiment with the platform tools. Everyone has their own preferred learning method!