Home ownership ain’t all it’s cracked up to be. Even Elon Musk says he’s selling his houses and “almost all” of his physical possessions. (LINK: https://www.businessinsider.com/elon-musk-selling-belongings-house-tesla-stock-2020-5)
Since Paragon Design Build is one of the largest affordable luxury apartment building developers in Winnipeg, we wanted to ask the question: Is it better to rent or buy in Winnipeg?
If you like what you see, then consider heading over to Rentals page to see some of the fine suites for rent today.
For years, people been told that home ownership is highly desirable. We’re told from a young age that owning is better than renting. You know the argument: owning means you get to build up equity in a property, but renting means you are just paying someone else and not getting any of the benefits.
Not so fast!
While owning makes sense of some people, there are plenty of reasons to rent instead of own your home. In fact, we think you may want to feel a bit sorry for your mortgage-paying friends.
WinnipegREALTORS reported that real estate sales were down by 19 per cent in May 2020 compared to the same time last year. There were also 21 per cent fewer listings, which makes the sales decline even worse by comparison.
We recognize that the market was hit hard by COVID-19, but it’s a reminder that real estate doesn’t always go up in value. And it tells us that sometimes it can be pretty difficult to sell a home.
Here are 10 reasons why it’s better to rent than to own.
1.Flexibility on where to live, when to move
No worrying about housing prices or hiring a realtor if you rent. If you want to pick up and move to a new neighbourhood to be closer to work, it’s much easier to do when you’re a renter.
It’s also much easier to get up and travel for an extended time or move to a new city or country if you’re a renter. Being a homeowner means accepting you’re tied down a lot tighter to where you live.
2.Easier to downsize in a down economy
If you’re a renter in a down economy, you have greater freedom to downsize and move to a less expensive unit. If you’re an owner, you’re locked into a mortgage and may not be able to sell that quickly.
3. Fixed rent – no interest rate worries
Renters also enjoy cost certainty when it comes to rent. It may rise a bit year over year, but you don’t run the risk of major spikes from sudden interest rate changes. Rates may be low right now, but there’s no telling how long that will last.
4. No maintenance or repair bills
This is one of the best things about being a renter: no maintenance or repair bills. That is the landlord’s responsibility. You just get to enjoy living there.
5. Access to amenities
Many apartment buildings give tenants access to premium amenities such as fitness centres, pools, lounges and terraces. Adding similar amenities to a private home could cost tens of thousands of dollars.
6. No down payment!
Sure renters usually need to put down a security deposit, but that’s nothing compared to a down payment to buy a home. The average price of a detached home in Winnipeg in May 2020 was $327,000. Banks and credit unions require 20 per cent down for traditional mortgages, which works out to a $65,400 down payment.
You can qualify for smaller down payments through CMHC, but you’ll have to cough up extra fees to cover the fees on those “insured mortgages.”
There’s always an opportunity cost when you spend money. In other words, you have to consider how else you can spend the same amount. What opportunities are you giving up by committing to that down payment? There are plenty of ways to spend or invest $65,400! If you buy a home, that money will be locked in. You won’t be able to move it.
7. Property values can fall
We’re told to expect property values always to rise, but we know that’s not true. Look what happened in the United States in 2008 and 2009 when property values crashed. There are plenty of examples in history of property values declining instead of rising.
Neighbourhoods change too. Often it’s for the better, but not always. Sometimes an area can go into a long-term decline that supresses real estate values. Detroit, we’re looking at you!
8. Lower insurance costs
Another financial benefit to renting instead of owning is that renters generally pay lower insurance rates. After all, you’re just insuring the contents of your apartment, not the building itself.
9. Lower utility rates too
Homes can vary in size, but in general they’re larger than apartments. The larger the space, the more it generally costs to heat or cool. Rental properties – especially well-maintained or newer properties – can offer large relative cost savings on utilities for tenants.
10. Luxury at a discount
The bottom line is that renting generally gives you a much nicer place dollar for dollar than owning. A luxury apartment is usually much less costly than a luxury home after all.
If you’re looking for a new affordable luxury apartment in Winnipeg, head over to Rentals Page.
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