With the markets continuing to climb, many homeowners are anxious to cash in on the new highs, while others want to ride the wave higher and see if they can get an even greater return on their investment.
There is no real answer to this question as it largely depends on the individual homeowners, their financial status, and what they are trying to accomplish through home ownership.
Still, if you are adamant for an answer, here are a few things to consider.
1. The Case for Home Ownership
Home ownership comes with a lot of advantages and disadvantages.
Some of the advantages include:
• Owning a home that has likely appreciated tremendously in the current market
• Tax breaks if it is your first home
• A place that you own
Some of the disadvantages include:
• An expensive purchase
• The need to maintain your home
• Additional taxes to pay, especially if it is an income property or second home
With all of this in mind, owning a home, whether it is your first or second home, is a valuable thing so long as you can afford it.
As a rule of thumb, if you can comfortably make your mortgage payments without impacting your lifestyle and your ability to pay your other bills, you can probably afford your home. An average budget should allot 33% of your monthly salary towards your mortgage payment, 33% towards your other bills, and 33% towards your retirement.
If you are struggling to pay your mortgage because you financially overextended, or for other unforeseen circumstances, it may be time to consider selling, or renting!
2. Pros and Cons of Renting
Renting your home is always an option if you need help reducing the burden of your mortgage.
Some advantages to renting your home include:
• Reducing your monthly mortgage
• Turning your home into a source of income
Some disadvantages of renting your home include:
• Being a landlord is a lot of work
• You will have extra work to do come tax season
• Your home may get damaged by bad tenants
• You may be required to renovate your home to make it more attractive
• If your home cannot accommodate two living situations, you will need to find somewhere to live
In the case that you have a large home that has a well-defined main section and basement, you can easily section off your home and rent it out. If you are nervous about fully committing to the landlord life, you can even try and rent a room in your home to a student if you live near a major college or university.
The main goal of renting out your home is to reduce the amount you pay on your mortgage each month. By renting your home, you put your home to work for you and let someone else pay a large portion of your mortgage.
Still, the landlord life isn’t for everyone and it can be rather difficult if you aren’t prepared for all the challenges that come with it.
The one thing to remember is that you always have the option to live in, sell, or rent your home. These three options will always be available to you as a homeowner and you should take full advantage of them whenever you can.
As always, HomeLife White Rock is here to answer any questions that you may have. We have been serving the White Rock real estate market for many years and we remain committed to helping members of our community buy and sell homes at competitive prices.