Wondering if you’re ready to become a homeowner? In this post, we cover what you should have prepared before you buy a home.
Maybe you have planned your finances out. Maybe you haven’t. But today, this monetary truth on how you spend monthly for your home might just be more than insightful. Let’s get right to it. Here we talk about whether buying a home is cheaper than renting in Halifax!
Why buy a house when it’s so expensive?
Homeownership offers stability
Halifax has beautiful landscapes, excellent schools, and is an international destination for university students. New businesses are emerging because of its ports. Newer industries are rapidly growing because of it. And this creates multiple jobs.
There is a very strong intent for people in Halifax to reside long-term. Paying rent for a prolonged period of time is not always the best choice depending on your financial goals. Especially those with family and career goals, buying a house can offer you more stability in the long term.
It can be a sound investment
The industrial era mindset where depending on one job is long gone. Canadians are thinking further ahead now, with many looking for multiple streams of income. What better passive income for people than real estate? Several families buy houses to rent other rooms or their basement out. This pays off their mortgage. If you have a growing family, you can always have these rooms available for your kids. Over time, real estate will always appreciate and this will help to increase your net worth.
Oprah Winfrey once said – “I will forever believe that buying a home is a great investment. Why? Because you can’t live in a stock certificate. You can’t live in a mutual fund.”
You’re able to personalize your space
You have more freedom and options when you own the home that you live in. You buy it depending on the lifestyle you prefer considering the rooms, privacy, or storage space. This gives you the flexibility to change things up as often as you like, without having to ask for permission from your landlord before making significant changes.
You might actually save money
Let’s take a look at the average cost of owning a home in Halifax. These numbers are rounded for simplifying the calculation. In addition, these numbers are just examples and are not representative of what you may qualify for.
The average sale price for a house in Halifax in July 2020 was $360,000. With a 10-percent down payment and a 3-percent interest rate, your monthly payments would be around $1,600. When you factor in property taxes, which would be between $4,000 and $6,000 annually, your monthly cost (less maintenance and utilities) would work out to be around $2,000. If you’re looking for more specific information on property taxes in Halifax, and the specific calculations, you can find these on the Halifax website here.
House values appreciate, but so does your rent
Renting is a great alternative for those who want to move frequently with ease. Even for those who don’t want to pay as much for maintenance or want to test the environment – renting certainly gives you short-term flexibility but comes at the cost of long term price stability.
If you’re renting, you need to ask yourself the right questions:
- How much can I afford?
- How long do I plan to stay?
- What are my financial, career, and family goals?
- Do I want stability or flexibility?
- Should I rent in the neighbourhood before buying there?
- Can I afford the down payment for a house?
If you are looking for greater flexibility and are not looking to build roots, renting is still a reasonable option. For a student renting in Halifax or a beginner work professional who is looking to move around while experimenting with career decisions – renting is an ideal choice!
Now let’s review the cost to rent in Halifax
The average cost of a 3-bedroom apartment in Halifax, according to RentBoard.ca, is around $2,055 per month. The disadvantage here is since you don’t own it, you are not in control of your rent. Rent can often increase significantly year-over-year and this could leave you with the tough choice between moving, and paying more to rent in Halifax. With the significant growth in Halifax, paired with record low-vacancy-rates, unpredictable rental costs are the new norm.
The numbers start to line up when you notice that renting and owning in Halifax have similar costs. You may have to absorb higher maintenance costs and spend a bit more on utilities when you own a home, but you also lock in a predictable mortgage payment long term.
First time home buyers: Beneficial or not?
The easiest answer is that It all depends on your lifestyle. If you’re looking for flexibility, and are not sure whether you plan on settling down in Halifax, renting is your best bet. If you think that Halifax is a great place to call home, which we agree with, it might be the right time to speak to an unbiased mortgage professional to review your options. You might find that buying a home is the best option for your situation and financial goals!
When considering buying a home and are looking for a mortgage, give us a call at Clinton Wilkins Mortgage Team! You can give us a call at 902-482-2770 or get in touch with us here!