Where Do You Fall On The Rent Vs. Own Spectrum?
If your pipe bursts or you need to mow the lawn, those tasks become your responsibility and no one else's
Grab your coffee and grab a donut — preferably sour cream glazed because every other kind is trash, don't @ me — and let's get comfortable. Today we're talking about the ever-popular rent vs. own debate and delving into where my husband and I fall on the spectrum. It's been awhile since we've chatted homeownership — almost a full year to be exact — and one of my beautiful readers asked for an update on our status and how we feel about the rent vs. own dispute. *Me, preparing to get trolled for writing an opinion based piece that is clearly opinion-based but someone will think it's based on research and be upset for absolutely no reason other than the fact that we don't agree on something:
Let the battles begin! First of all, you're probably wondering what the rent vs. own spectrum even is. I mean, is it a play on a political spectrum? You bet your ass it is. And it looks something like this:
You see, typically there are three types of people when it comes to the rent vs. own debate. There are the group of people who live and die by homeownership, the group of people who live and die by renting, and the group of people who are like, "can't we all just do what's best for us and not argue because I'm tired and it's getting pretty repetitive?"
In between those three groups are the people who don't care that much but lean more towards owning and the people who don't care that much, but lean more towards renting. Personally, I'd say I'm on the "whatever is best for you" part of the spectrum, but I have my reasons for both renting and homeownership. After all, you are allowed to understand both perspectives. It might not be the spicy chicken of content, but it's still homestyle chicken, and that's why we're all here.
Our thoughts on renting vs. owning
One of the main things I like to tell people when it comes to renting and owning is that the final decision should be based on what part of your life you're in. What I mean by that is whether you're stable in knowing where you'd like to live for at least 10 years time and you are fully able to process settling down and living a much less "go with the flow" type of life. Why? Because I think we can all agree that home ownership is a lot less flexible than renting — much like owning a dog is a lot less flexible than not owning a dog (now you're paying attention because I'm talking about dogs). For example, if your dog needs to go for a walk or be fed at the same time each night, you can't just ask someone else to do it and head off on a weekend getaway without worry. The same goes for homeownership. If your pipe bursts or you need to mow the lawn, those tasks become your responsibility and no one else's. This revelation brings me to my first point.
We are pro-renting for financial reasons. Homeownership in Canada is much more expensive than renting. You can use your "I'd rather pay my own mortgage than someone else's mortgage" reasoning all you want. However, that doesn't prove much other than the fact that you really are more like your parents than you thought. My main logic here is that I could invest a lot more money if I remained a renter for the rest of my life while earning a much higher return than if I were to invest most of my money into a property. To be honest with you, spewing the math just isn't my cup of tea — but here is a perfect post by Preet Banerjee about the cost, a comparison of rent vs. own in a video, AND a free spreadsheet that can tell you which option is best for you. In the end, it would be better financially for me to rent than own — and numbers don't lie.
We are pro-homeownership for psychological reasons. Many financial experts will tell you that money management is 80% based on behaviour and only 20% based on knowledge. This sentiment is even more realistic when it comes to the rent vs. own debate. My husband and I are entirely pro-homeownership for psychological reasons at this point in our life. We are ready to settle down in our chosen city, start to grow our family and begin to build traditions and memories in a place we call our own. On that note, it's always good to remind people that you are allowed to move along the rent vs. own spectrum, just like you are allowed to change your political views throughout your life. No one gets to tell you that you're a hypocrite for changing your mind — especially when it doesn't directly affect them.
Why we're not your typical homebuyers
The average Canadian homebuyer is in their late-20s, more commonly defined as a millennial, and they plan to spend around $300,000 to $400,000. 40% of Albertans (which is us, hello) are more likely to seek bigger homes with 4-bedrooms. So, in some respects, we align with most of the profiles created surrounding statistics about the average Canadian homebuyers. However, there are also a lot of differences between us and the average homebuyer.
Most people look to break into the market by buying a starter home that they'll be able to grow into over the next five to 10 years. From there, they opt to move on to a larger property. We, on the other hand, only want to buy one. The last thing that we want when it comes to buying is to have to do it more than once. We're not entirely sold on the "starter home" idea, but we are completely sold on looking for our "forever home."
Most people receive mortgage pre-approval and spend a touch under that pre-approval amount. We will likely only pay half of what our mortgage pre-approval allows for. Lastly, most people buy their homes for a significant portion of their retirement plan. We are not banking any of our future savings on a home that may or may not provide a return. Our main reason for buying our house is to build our roots, and any financial gain from the property would be considered a bonus.
What is our plan?
If I had a nickel for every time we've had to push back our plan to buy a home, I'd probably have enough to buy — a small coffee from Tim Hortons. But honestly, we've been waiting for awhile. Financially, we are almost ready. However, the reason we cannot buy right now is that we're currently living in Fort McMurray, and we will not be buying property anywhere other than in Calgary. The plan is to buy a home right before we move back so that we do not have to move ever again. My husband and I have been together for eight years, and we have already moved eight times, with one more move to come in the next few months. So yeah. I'm over it.
When we move back to Calgary, we plan to buy a home outside of the city or in a smaller suburb. Both of us grew up on the outskirts of YYC, and we loved it. One place we'd love to buy is Cochrane because it's close to the city, yet even closer to the mountains. Not only are the prices more affordable, you also tend to get a lot more space and a lot more options for new builds within the same price range you would pay to buy a one-bedroom apartment in inner-city Calgary. I think we can sacrifice a quick drive to downtown if it means we get a mountain view and enough guest bedrooms to fit both of our families.
Homeownership means having tough conversations
My husband and I have been talking about home ownership for three years now, and even more seriously so this past two years. We regularly watch the market, discuss our wants, and put away large chunks of our paychecks to reach this goal. The excitement is real. However, what's also real when it comes to making a substantial financial purchase with another person is having tough conversations. We've had plenty of in-depth discussions about the down payment, emergency funds, our maximum budget and our feelings towards where we want to buy. I'd encourage others who are planning to buy with a partner to do the same. What are some of those questions you can ask? We went ahead and played a game of "Matchmaker: Home Edition" for you to get a better idea of our plan and what you can do to begin to prepare yours!
10 questions you and your partner should ask each other before you buy a house
Where do you fall on the rent vs. own spectrum? Let me know in the comments!