From Tenant to Landlord: Pro's and Con's

Switching your status from tenant to owner can bring its own challenges. So before you decide whether homeownership is your next step, take a glance at this list of some pros and cons below.

Pro: You can customize anything

Paint the walls. Tear out the plastering. Break the walls to make a room bigger. When you own a property, you don’t have to wait for a management company to decide when, and how, a unit will be remodelled.

Con: You pay for the upgrades

If the water pumping machine breaks down in your rental, you can simply call maintenance to get the issue fixed, often within a day. When you own a home, not only do you have the headache of finding a reliable repairman available at a convenient time, but you also have to cover the cost of all repairs (and heaven forbid, replacements).

Pro: You establish roots

You needn’t worry about your rent going up next year (depending on your mortgage). If you plan to stay put for a while, you’ll build long-term relationships with your neighbours and can feel free to finally grow that vegetable patch you’ve always wanted.

Con: You lack mobility

When renting, it’s easy to make a change when the lease is up or even, in dire circumstances, break a lease if you have to relocate right away. If you suddenly need to relocate as a homeowner, you’ll remain responsible for the monthly mortgage until your home sells. In hot markets this isn’t a problem, but it’s not unheard of for homes to remain on the market for months.

Pro: You build equity

When you sign your rent cheque each year you’re handing off money you will never see again, usually in huge amounts. In comparison, as a homeowner your cheque is going toward paying down the overall price of the home. Ideally, when it’s time to move on you’ll be able to sell your home for at least as much as you paid for it.

Con: You’re at the whim of unpredictable markets

Ideally you’ll be able to sell your home for the same price you bought it for, if not more. Unfortunately, the housing market can be volatile. Some homeowners end up underwater on their home, owing more on their original loan that the property is worth.

The bottom line? When you’re ready, there are many great benefits to home ownership, but it’s not a decision to be made lightly. A RE/MAX agent can use his or her knowledge of the market and your personal situation to help you decide your next move. Find one here: