Think thoroughly about how to answer these questions above.

1. DO YOU HAVE A STEADY JOB?

If you don’t have a steady job rather wait with your purchase. You can still buy the property as an investment and rent it after you change your job and you need to move closer to your new employment. Owning a property just for a short time and selling might cost you money if your company is not paying relocation costs or if you didn’t own the house for a long time to build some equity.

2. ARE YOU PLANNING TO MOVE AGAIN SOON?

If you are planning to move soon even if you will live in the area where the market value will go up there are pretty big expenses when you buy and sell your home. When you buy you usually don’t pay commission but you pay land transfer tax, lawyer’s fees and if you cannot pay 20% down then you pay also mortgage insurance. When you sell average commission is 5% of the selling price plus lawyers fees. Be also careful about paying mortgage penalty if you pay off your mortgage earlier and your situation doesn’t allow you to roll over your mortgage buying another
property.

3. DO YOU PREFER A HOUSE OR AN APARTMENT?

Living in an apartment is pretty comfortable but can be expensive in regard to maintenance fees. Preferring living in a house? What if the furnace, appliances or other expensive items broke down? Do you have enough money to do major repairs like roof, heating windows…? Even when buying carefully we will always have some surprises. Things that need to be done but we didn’t include them in our list.

4. WHERE WOULD YOU LIKE TO LIVE?

Is the area where would you like to buy affordable? Did you try to compare mortgage (housing expenses) vs. renting expenses in your area? For example, in GTA (Great Toronto Area) you can see that the prices for residential properties are so high that it might be better – cheaper for people to rent these days. It is not uncommon to see a family of four to sell their home and rent. They paid for their mortgage $1,800 per month plus being responsible for all maintenance costs. Now they are renting a place for $1,400.

5. HOW MUCH CAN YOU PAY?

When planning to buy you should consider these expenses: mortgage payments, property taxes, house insurance, maintenance expenses, utilities. Compare it with the rent for similar properties and your question renting vs buying a home is answered.

6. WHAT IS YOUR LIFESTYLE?

Do you like to travel? Are you mostly away from your home? Do you actually enjoy working around the house?

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7. WHY ARE YOU BUYING?

We all have different reasons why? I was renting one place for 2 years. One day my landlord asked me to find another place for myself because he needs the house for his family. Two weeks later he called me that we can stay. This happened a couple of times within 2 months. I had kids going to elementary school and I didn’t want them to move whenever some landlord decides to terminate our agreement. I felt that I’m not in charge and I don’t like this feeling :). Within 2 months we bought a house!
 

Other people buy a home because they feel that it is the best investment. They love the ownership! They love to do improvements and decorate the place to their taste.
 

Never buy the property because your friends or co-workers are buying. Ask yourself these questions above again and answer them honestly? Don’t try to keep up with Jones’s.