Rent to own properties have been a great way for first time home buyers to have the ability to purchase their first home; however, with the extremely low interest rates, this old strategy no longer works. In today’s booming real estate market, a new strategy is needed for new and old home buyers.
Evolution of Rent to Own
The fact is, in today’s real estate market it is now cheaper to own than it is to rent. For an average $400,000 property, it can cost as low as $1300/month to own, whereas if you rented the same house, it would cost as much as double the amount. Not to mention the equity that is being built and the property appreciating.
The fact is home ownership is within everyone’s reach; however, a house that is more than affordable at 3% may not be affordable at all when rates reset at much higher interest rates.
The cold fact remains that house prices are going up far more faster than annual incomes for people living in Canada. This will eventually cause depreciation in the amount of disposable income the average person has.
Is it a right time to buy? Yes. Is it the right time to live beyond your means? No.
Do the economy a favor and live within your means.
Do you know any examples of renting vs. buying? What is your home ownership strategy?
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