To many people, there is simply no debate when it comes to buying or renting a home. The age-old advice is that buying is better whenever you have the means, and renting doesn’t make sense.
However, Peterborough real estate comes with several nuances that could potentially affect your decision. Today, we’ll look at a few different scenarios to help you determine whether it’s better to rent or buy a house.
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The New Reality of Peterborough Real Estate
Peterborough has long been an oasis for GTA residents seeking a more affordable lifestyle. Even though housing values are also on the rise here, your dollar will still stretch much further than it would in Toronto.
With Toronto condo prices averaging out to over $700,000 as of late 2024, first-time buyers are especially limited – if they can get into the market at all. No matter how much real estate values rise in Peterborough, it’s unlikely that they will ever come close to what you’d pay to buy or rent in Toronto.
Buying a house in Peterborough means getting a lot more living space for a lot less money. If you don’t believe us, see for yourself in our featured listings right here.
You can’t go wrong by choosing Peterborough, whether you buy or rent. Discover just a few reasons why in the posts below:
- How Peterborough’s Entertainment Scene Rivals That of Toronto
- What Does a Night Out Look Like in Peterborough?
- All About Peterborough’s Stunning Green Spaces
The Pros and Cons of Renting
The number one downside of renting is obvious; there’s no chance to build equity, and you don’t have a mortgage-free celebration party to look forward to. That said, there are other considerations.
You won’t have the same freedom to renovate and design your space the way you want to. Any project has to be approved first by your landlord. Plus, there’s no financial advantage to you as a tenant. If you invest $3,000 and end up adding $6,000 to the home’s value, the landlord benefits, not you.
You don’t have the same security as a tenant as you do when you own the home. After your lease expires, your landlord can decide they want the house for themselves or sell it. Though there are laws against unfair evictions, they can be challenging to fight in court.
Lastly, finding a suitable rental unit can be difficult, especially in Peterborough. Demand is high but supply is low, with vacancy rates falling below 1% in recent years.
In spite of its challenges, renting does offer some advantages over buying. The first and most significant is the barrier to entry. You need the first and last months’ rent, which is much less than the down payment for a house.
It’s also easier to move on when you’re ready, depending on the terms and conditions of your lease. If you don’t want to commit to a particular home in a specific city, renting may be the better path for now.
A successful home purchase begins with the right information. The posts below will help you plan:
- Why Now Is the Time to Buy a Home in Peterborough
- How Can You Make Your Home Offer More Irresistible?
- How Do Interest Rates Impact Buying Real Estate?
The Barriers to Buying a Home
No matter where you decide to buy a house, you will need a substantial amount of cash available, as well as a healthy credit score. It’s not just the purchase price, but all of the associated closing costs and moving expenses in addition to having a rainy day budget. For now, let’s zero in on the resources you’d need to purchase your home.
- The down payment guidelines have recently changed, but you still need access to a significant sum. For example, the down payment on a $700,000 house would be $45,000 (5% on the first $500,000 and 10% on the remaining $200,000.
- Closing costs can add another 3 to 5% of your total costs. You can add some of these to your mortgage. However, land transfer taxes must be paid upfront in cash.
- You will want to set aside some money to update your new home. There will always be something you need to make it feel just right, even when buying a move-in ready house.
Keep in mind that some of the barriers to buying a home aren’t just financial. There’s a mental and emotional aspect as well. Owning instead of renting comes with more responsibilities, as well as a long-term commitment.
When buying a home, one of your first decisions is “where.” The posts below can open up some possibilities:
- Peterborough vs. Other Small Cities in Ontario
- 6 Peterborough County Towns You Have to Know About
- Why We Love These Charles Court Condos in Lakefield
The Benefits of Buying a Home
Financially speaking, buying a home is often the better path. Every mortgage payment brings you closer to owning your property outright. Imagine the joy you will feel after making that last payment and becoming mortgage free!
If you decide to pack up and move a few years from now, you’ll benefit from increased equity. Selling your house for far more than you paid for it puts you at an advantage, no matter where you go next.
Owning a house is a bigger responsibility, but it also comes with a sense of security and pride. No one can raise your rent or ask you to leave – you can move or stay when you decide it’s to your advantage. If you love the idea of having a place that is truly your own, and you have the resources to make it happen, you really can’t go wrong with the choice to buy a home.
Would personalized guidance help you decide whether to rent or buy your next home? Our Peterborough real estate agents are standing by. Reach out to team@jeffandkatie.ca or call 705-243-9797 to learn more about your options.
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