Yup, it’s true: Buying a home in Toronto is one of the smartest financial decisions you will make. Given that the cities property values have increased by an average of 12% over the last 10 years or so. If you choose to rent, you will always be poor, declares real estate guru and best selling author David Bach. And many more worldwide billionaires share the same sentiment.
Some people choose to wait and sit on the fence because it is their belief that the real estate market will crash and re-correct itself. These people will more than likely never buy a home and achieve the American/Canadian dream. Even if prices start to plateau or just rise at a normal rate of 4% per annum you will run the risk of pricing yourself out of the market, the longer you wait the more difficult it will be.
Don’t expect much from the Buy vs Rent calculators to help either, the data that you input is never accurate, many calculators fail to consider many variables such as predict events, future appreciation, earnings you would lose if you invested it in the stock market; that variable in itself can’t be predicted.
Allow me to ask you a question, if I told you that you could own a home and only pay a fraction of the total debt per month; would you consider home ownership then? Yes you read the question correctly! I will give you an example- buy a duplex in Toronto that fits your needs as far as space and location is concerned, then split the home into 2 units and rent 1 unit out while you live in the other. This method of buying a home in Toronto allows you to pass the bulk of the debt load on to someone else while you enjoy Fee Simple Ownership. Now someone else is helping you pay down the mortgage as opposed to you helping someone else pay theirs!
If you’re not convinced yet, then consider these other benefits to buying a home.
Appreciation-If we research the past 100 years or so the data shows that Real Estate increases at an average of 4% per annum.
The pride of Ownership- it might sound funny, but think about it for a second, it means that you are entitled to paint your walls any colour you choose, turn up the volume on the stereo, and hang pictures where you please. Home ownership represents something greater than those little things i just mentioned, it means stability and security in the family household.
Equity is earned over time-as you pay down your financial obligation each month it reduces the debt which in turn means that you are in pace to owning an asset. An asset that over a period of 20 years or so will be close if not double in value.
Equity Loans-Over time your home will increase in value which in turn allows the freedom to borrow against the equity, borrowing against the equity makes sense as the rates are much less than a credit card for example. And please I don’t mean use your home equity as an ATM machine, this method of borrowing in my opinion should only be used to acquire another asset which in turn will earn you another means of disposable income.
The passing on of Assets-I haven’t met anyone in my life that has told me that they are eager to die! But I have met many who tell me that they can’t wait to get their hands on that fortune! Putting our loved ones in more stable financial place is not a bad thing regardless if they deserve it or not.
Jump on the bus and get out of the rain! As when you step off, the sun will shine down on you!
For more detailed consulting as to how you can achieve the dream of home ownership please visit me website or if you prefer, you can reach me at 416-769-1616.
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