Buying vs. Renting: Is Homeownership Worth It?

Today we're tackling the issue of buying & owning a home versus renting and what it means for any of your long-term business and investment plans.

I came across something on social media that someone had done up showing how their investment in a house after 3 years had cost them roughly the same as if they would have rented. So I did some numbers of my own...

Say you're looking to buy a home worth $650,000... (here in Vancouver that would get you a condo or maybe a townhouse - but obviously this price will get you different homes in different locales):

- A down payment of 10% would be $65,000 for a mortgage of $585,000.

- Monthly mortgage payments would be $2,928.65.

- Add on Home Owner's Association ($300/mo) & Property Tax ($133/mo) and that gives you an extra $433/mo.

-- $2,928.65 + $433.00 = TOTAL MONTHLY PAYMENTS: $3,361.65

- $3,361.65 x 12 = YEARLY PAYMENT: $40,339.80.

So a yearly mortgage would cost about $40k - and this isn't including things like real estate fees, maintenance, and other costs associated with owning a home.

What about renting?

Say renting costs $2,000/mo... you're looking at $24,000 a year for rent VS. $40,000, for a difference of about $16,000.

Now the point of this video is not to say don't buy a home - but to give you guys some insight into the bigger picture. Are you good with money or bad with money? Sometimes a mortgage can act as a forced savings account for people who aren't good with their dough. Do you own a business? It might be better to rent and invest your cash in things that will help you grow than to park your capital in a home. These are all things to consider and everyone is different, but hopefully this video gives you guys some value and understanding about when home ownership is worth it, and when it isn't.