Why are We Being Poorly Advised Against Homeownership?

Something strange has been going on over the past decade. We’re often being told – and, in many cases, convinced – that it’s better to rent than to own.

I firmly believe everyone should own their home. In fact, I think we should own at least one investment property… and, in many cases, more than one, but I’ll get to that in a minute…

I can understand why many people, particularly Millennials, are believing it’s better to rent than own. After all, it’s easier to rent. Just look online for a condo or house for rent. Apply, sign the lease and you’re done. We’ll call this the Convenience factor.

Compare this with buying. You need to find a home, negotiate the price, get a lawyer to check out the property, have a home inspection, and then apply and qualify for a mortgage (which is a little harder now thanks to all the wonderful Federal government mortgage rule interference – I mean tightening. Uh, no, I mean changes – so we don’t take on too much debt).

It takes more effort and planning to buy vs rent. Someone once told me that nothing worthwhile comes easy… and if it was easy, everyone would do it. This has proven to ring true for just about everything. And homeownership is no different.

IGNORE THE MEDIA’S DOOM & GLOOM NEGATIVITY!

I get it. You feel like the odds are stacked against you. Even if you were thinking about buying, you start your online search and what do you see? Negativity, right?!

The mainstream media continually reports about how buying and owning a home is a bad thing. They list every reason under the sun – from an impending housing bubble (heard that one for 12 years now) to prices being too high and we should wait until they decrease. I’m sure you’ve also heard the one about interest rates being too high (even though they’re still hovering well below the long-term average of 5.5%. Right now, interest rates are sitting near all-time lows at just over 3%!)

Oh, let’s not forget the theory that you can rent and invest while getting a better return without the hassle of homeownership. Sure, if you’re confident that your rental unit won’t be sold and you’ll be evicted, causing you to look for a new place at current market rents (which just happen to be at record-high levels right now).

And how many people do you know who have really made a good return on their stocks or mutual funds buying investments?

You must also consider how many people you know who have made a good return on real estate over the last 3, 5, 10, 15, 20, 30 years!

Last time I checked, the winners are real estate owners.

THE RIGHT & PRIVILEGE OF HOMEOWNERSHIP

There’s a lot of talk about rights these days. A little too much for my liking, yet I do believe that living in a country the size of Canada (with such a small population compared to the rest of the world) means we really should strive to own a home. But, homeownership is a privilege, so you have to earn the right!

Owning does many things, including:

1. Creates a sense of pride
2. Adds responsibility and purpose
3. Secures a sense of inclusion to your neighbourhood
4. Acts as forced savings

One of my close friends is in senior management with a major corporation. Years ago, he told me something that has stuck with me. He said, “I like my employees to own a home and have a mortgage. They’re motivated to perform because it gives them drive and purpose.”

I’m not saying that everyone should own today, but when it’s right for them. For some, it makes sense to rent. Those in their twilight years, for instance, should probably cash out and rent to enjoy their retirement. Too often, I see the elderly hanging on to the family home for no logical reason. Instead, they give up all the comforts of life during a time when they should be enjoying themselves.

It makes sense for all of us to strive to own and invest in something that has proven to be a good long-term investment. It’s possible to own, even today. If you aren’t sure, or if you are sure and want help structuring your mortgage plan, call an experienced Mortgage Broker. All good things start with a solid plan.

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Steve Garganis: 416-224-0114; steve@canadamortgagenews.ca