Home ownership is a dream that many people across the world aspire to. Having a place to call your own is a natural human drive and comes with many benefits that you just can’t get any other way. And while there are many benefits to the freedom that renting a place can provide, and it is certainly nice to not have responsibility for upkeep, there are many reasons why buying is better than renting. In my experiences selling homes in the Toronto area, the main reasons that I’ve seen are:
Although there is no hard financial reason here, you cannot discount the emotion and sense of pride that owning a home elicits in people. Knowing that you are free to do with it as you wish and that it is a little piece of the Earth with your name on it is something that renting just can’t give you.
Lateral movement vs moving forward
Ask any football or basketball coach and they will tell you that lateral movement is nice but it isn’t working toward the goal. Teams are always working toward getting to the end zone or getting to the hoop. When you are renting, you are making a lateral movement. You are staying in one place financially. While this is good for people who don’t have the financial means or enjoy freedom, it doesn’t make sense for people looking to achieve financial goals. When you buy, everything you pay isn’t an expense, it’s an investment. Every dollar you pay off of your mortgage is an investment into your future life and toward having tangible financial assets.
It is in the government’s interest to incentivize home ownership. If home’s aren’t being bought, then people aren’t building equity, banks aren’t loaning money, contractors aren’t buying land, or building homes, and logistics companies aren’t moving home materials, etc. See what that means for an economy? The government offers many tax benefits for those who have mortgages. When you rent, you pay the same amount at times as a mortgage without receiving any of the government incentives.
While the economy fluctuates, rates vary, and prices rise and fall in the market, some things always remain the same when it comes to home ownership. In my experience selling homes in Vaughn, ON, I have come to realize why buying is better than renting. If you want to have the freedom to move around without responsibility, then rent. If you want everything else, then buy.