Are you looking at MLS Woodstock Ontario and wondering if it is better to buy a house or rent a house? There are a number of factors involved when making this decision. At Realtown we hope to provide you fundamental information to help ease the decision making. So next time your search MLS Woodstock Ontario you know exactly what you are looking for.
When deciding whether to rent or buy a home, the most crucial thing to consider is how long you expect to reside in a particular location. Overall, the longer you want to stay, the more cost-effective it will be to buy a house – therefore look at MLS Woodstock Ontario and think about buying.
Home ownership improves with time as the value of the home increases and the costs of purchasing/selling the home are spread out/amortized over a longer period of time. Real estate broker commissions and legal fees are included in the cost of selling a home, while land transfer taxes and legal fees are included in the cost of buying a home. Contact Yasir Khan at RE/MAX for more inside tips and suggestions for MLS Woodstock Ontario search.
MLS Woodstock Ontario – Should I Buy a House?
When searching MLS Woodstock Ontario – Buying is generally recommended if you plan to reside in an area for a long period of time as there are a number of advantages to owning a property:
- No Evictions: You own the property, this is your home, you choose what do to without landlord interference.
- Rental Income: You bought a property and have decided to move? But you have good income and down payment. Your first home can become the perfect rental property.
- Better Saving habits: You will learn to become more financially disciplined.
- Long-term investment: Property values are always on the raise – take advantage of the appreciation rates.
Yasir Khan a real estate agent at RE/MAX is your key to your MLS Woodstock Ontario success
Expenses for Homeowners
Almost all home owners end up borrowing funds from the bank and make mortgage payments. Owning a home would result into some additional expenses such as: property taxes, home insurance, condo fees for a condo unit, and generally maintenance of the home. Home insurance for most Ontario residents are between $600 to $1,000, and for taxes be sure to check the local mill rates for your city or municipality.
Scenario: Yasir and Fatima are newlyweds and are searching MLS Woodstock Ontario, seeking for a place to stay. They’re looking for 3 bedroom, 2 bathroom properties on the MLS Woodstock Ontario. They are both career-driven and intend to stay in the area for the next three years. Is it better for Yasir and Fatima to rent or purchase a home in St Thomas?
The average rent in London for 3 bedroom and 2 baths is $2100. The price to purchase a property with similar characteristics is around $500,000 for a semi-detached property. With savings of $100,000 (20% of the purchase price), the couple are able to obtain a mortgage pre-approval from a lender. For a mortgage with a 25-year amortization, the lender offers them a 2% interest rate. They will have to spend around $2400 in property taxes and $600 in home insurance if they purchase their MLS Woodstock Ontario home. They will also have to pay $6500 in closing costs from both the purchase and sale of the house, not counting the agent commission. The value of the property will increase by 5% every year.
Looking at the above number: Yasir and Fatima will be paying around $70,000 over the course of 3 years for owning their property and around $16,000 in other costs. In the current market situation that is about $17,554 in interest payments and the remainder is paid to principle. During these 3 years the property appreciated and resulted in additional home value of $78,812. So considering the costs with selling a home and real estate agent commission you have about $185,500 in cash on closing of your property. The figure is based on the 100,000 initial deposit, the 78,812 in appreciation, and the 52,446 you paid in principle towards your home and subtract the $16,000 for taxes, insurance, and other costs. Essentially you have almost doubled your investment over the 3 years a win on their MLS Woodstock Ontario search.
MLS Woodstock Ontario – Should I Rent?
Renting is generally recommended if you do not plan to stay in a specific location for a long period of time. There are many advantages to your rental MLS Woodstock Ontario instead of buying, and these include:
- Flexibility: Renting provides you the freedom to move around and change locations whenever you choose. If you’re planning to downsize or upsize in the near future, this may be the case. You may also be required to relocate regularly due to employment, school, or travel.
- No Closing/Selling Fee: There aren’t many costs connected with renting a home. Fees might quickly mount up if you move frequently and buy/sell a property each time.
- Down Payment: A mortgage down payment on a property might be a significant sum of money to save for and pay in advance. You simply have to pay the first and last month’s rent, as well as a key or security deposit, when renting.
- Maintenance: Homeowners are responsible for the upkeep of their property and the repair of any faulty appliances. This can include fees for roof repairs, appliance replacement, broken light fixtures, and other maintenance issues.
Considering the property Yasir and Fatima were looking into and the rental potential for a similar property – expect Yasir and Fatima to pay around $2,100 per month. Over the course of 3 years they would have paid $75,600 – this is almost the appreciation value for owning the property. It is clear by renting you will not be a winner in this current market situation. Rental costs are relatively high when compared to purchasing a property. This is the primary reason when searching mls listings people focus on purchasing a home vs seeking rental options.
Owning real estate entails some risks, such as maintenance and probable depreciation. However, if you look at real estate values over the last 20 years, they have climbed by roughly 6% every year on average.
When it comes to real estate, there are several dangers to be aware of. Perhaps the market will continue to fall, as it has in recent years. Real estate, on the other hand, should be viewed as a long-term investment vehicle, and if you buy with a 5- or 10-year time horizon in mind, you should do quite well financially.
Here’s the real estate secret that the most successful people have figured out. If you put down 5% as a down payment, the bank will cover the remaining 95% of the cost.
Assume you purchase a $400,000 home that appreciates at a rate of 6% per year. What this truly implies is that your return on investment will be determined by “your investment,” which is the 5% down payment of $20,000 in this case. Your net equity appreciation, on the other hand, is based on the home’s overall worth. So $400,000 multiplied by 6% equals $24,000 each year.
So, with a $20,000 investment, you made $24,000 in a year. That is true leverage, and it is what accelerates your long-term financial riches!
In other words, you were compensated for money you never possessed because it was the bank’s money in the first place. As a result, your real return on investment that year is 120 percent.
Simply ask yourself, “What is the worst thing that might happen to you as a real estate owner?” It’s likely that you’ll pay for it in the long term, and it’ll be free and clear in 25-30 years. Imagine being able to retire without having to pay a mortgage. Instead of renting at 50, wouldn’t it give you a lot of peace of mind?
Next time you or your loved ones are searching MLS Woodstock Ontario be sure to consider buying a home.