CN So you may never own a home. Here’s why maybe that’s ... a good thing? - While it’s easy to feel you have to make home ownership a goal in life, it’s not for everyone, Lesley-Anne Scorgie writes.

https://www.thestar.com/business/personal-finance/so-you-may-never-own-a-home-heres-why-maybe-that-s-a-good-thing/article_e51919f0-f8f4-11ee-8af2-abc0dda935ea.html

https://archive.ph/q0BOf

The federal government recently announced changes to the borrowing limits on the RRSP Home Buyers’ Plan and introduced 30-year amortized mortgages for first-time homebuyers purchasing new homes, moves meant to make home ownership more affordable.

These measures don’t bring unreachable housing prices down, nor do they bump up household salaries required to support higher mortgage interest rates. In the most expensive markets in Canada, including the GTA, households need to earn well over $215,000 to buy a very basic property — we’re not talking yards, views and pools.

While it’s easy to feel owning a home is a life goal, it might not be a bad thing to consider forgetting it altogether. Here are some benefits of being a lifelong renter:

There’s geographic flexibility in being a renter​

You can consider working in places where you’ll be paid the highest for the kind of work you love doing. Homeowners are literally bound to their properties and thus their local work opportunities. If higher wages aren’t the key driver for moving, maybe a better lifestyle is. Moving closer to nature, or to a location that’s better for your mental health and maybe even your pocketbook, is always on the table for a renter. You can end your lease, pack up and plant roots elsewhere.

You don’t have to get your hands dirty as a renter​

Life can be less complicated. You won’t have to spend time, money and energy repairing a leaky roof, fixing a cabinet, worrying about nearby zoning changes or stressing about higher utility costs or mortgage payments. And just imagine all the extra time you’d have to invest in growing your income or playing with your kids, if you weren’t always DIY-ing another house project.

You might end up with a lot more free cash flow​

The total costs of renting (rent, utilities and tenant insurance) can be way less than the costs of home ownership (mortgage, utilities, taxes, maintenance, repairs, insurance, etc.) for a nearly identical place. Try running the numbers on your scenario. Here’s how I look at it.

If, for example, you buy a condo for $550,000, and put 20 per cent down (that means you need to come up with $110,000 plus closing costs), and you take out a 25-year mortgage at 5.3 per cent, the monthly payments are about $2,650. I like using CMHC’s mortgage payment calculator, btw.

If condo fees are $500, taxes are $200, insurance is $100 and utilities (hydro is commonly paid even in condos) are $100, plus a small reserve fund for future repairs of $100 are tallied up to $1,000, that will bring the total costs to run that property to $3,650 per month.

A comparable rental might cost $2,200 per month in total ($2,050 for rent and another $150 for utilities and insurance), and you don’t have to come up with a big down payment or closing costs.
This comparison might reveal you’ll have a lot more cash flow than a homeowner. That money could be used for adventures, travel, debt reduction, savings and more diverse investment activities.

Less debt as a renter​

Homeowners often find themselves in need of fast cash, and use a home equity line of credit to “borrow” against the equity they have in their home. Homeowners just need to cover the interest, typically, but don’t necessarily have to pay the principal money back until they sell the home. Sounds nice, right? Think again — many owners have basically turned their homes into ATM machines, scooping out huge portions of equity for roof repairs, renos, debt consolidations and car purchases, and have no plans to rebuild that equity. Many hope for higher appreciation on their homes to build equity (a risky proposition) by the time they sell, rather than paying down their mortgage debt (a conservative way to build wealth).

The upside for renters? They don’t have access to these loans to begin with.

If after reading this you’re still feeling bad when someone a lot older than you says, “You’ll never build equity by being a renter,” know that you can create an almost equal playing field financially by saving and investing more. Some renters like to sock away the difference in value between rent versus the full cost of home ownership, on top of their regular savings. Others take a more balanced approach. A really good financial planner or money coach can prepare a long-term financial projection, and help get this money working for you.

 

[Doktor Grimm]

Lmao, as if people can even afford to rent right now. Remind me again why housing is considered a commodity to be bought and sold and leased. At this rate I'll be thirty before I can live someplace on my own.

 

[Otterly]

I rented for years as a student and young career academic. Hated it. Landlords almost always scum. Only decent place I ever found was one where the owner had just one property and was stationed abroad for a few years. Kept it nice for her and fancied the garden up. But it’s never really a secure way to live. It has its place - if you’re a student or on a short term contract or placement for example.
Having your own home, where you know you won’t be kicked out, where you can decorate as you wish and make a garden you know you’ll be able to grow into is wonderful.
People NEED homes. Not just a pod to sleep in they need places to put down roots. But roots lead to all that blood and soil stuff don’t they so no roots for the plebs

 

[Clem Fandango]

OK let's look at these "benefits" of never owning a home one by one.

There’s geographic flexibility in being a renter

I'm literally leaving the country in a couple of months. I'll be renting out my owned home from abroad. People are so desperate to rent it that I got my first viewing booked within an hour of the advert going up. I have complete geographic flexibility.

You don’t have to get your hands dirty as a renter

Fair enough, as a home owner you naturally want to do some DIY where you can to save money. But those skills are useful. And for big jobs ("fixing a leaky roof"?), yeah I've got home insurance and will just get a professional in to fix that.

You might end up with a lot more free cash flow

Bollocks. My mortgage payment for a three bedroom house is less than what people pay in this area to rent one bedroom in a shared house. The last ten years of owning, I've paid down half the mortgage, built up tens of thousands in savings and six figures into my pension. Rentcucks often complain that they can't save up the deposit for a house purchase.

Less debt as a renter

I don't even understand this one. Not having access to loans is a good thing? That only makes sense if you're irresponsible and don't understand how money works.

These are the best they could come up with? This is pathetic cope. Owning your own home is awesome, and has been a life goal for most people since, like, the feudal period at least. Disgusting bugman propoganda.

 

[Tealeaf]

Renting should be an affordable and flexible way to live short and long term. Ideally one you could confidently choose even if you can afford homeownership right away.

When you can’t comfortably afford any housing, renting is the most accessible way to lose the majority of your income to basic necessities.

The root cause is NIMBYism. The only thing you can do about it is uproot and move somewhere else, because if you can’t afford to live, you are not welcome there.

 

[ZazietheBeast]

I guess the point of unironically living in a shack within the woods sounds like a much more viable plan than it is to buy property in Canada. And the good news is, there's tons of info on that kind of living.

 

[Equal Rights for Androids]

No. Just no. Maybe if your home was built a century ago or on a flood plain but most people I know have never had a flood in their basement .

My dad had a flood in his basement recently. The pump was overwhelmed by the amount of water. It's useful to do if you live at the bottom of a hill or in a hurricane area or tornado area, too. Cardboard boxes come apart easier in a tornado than plastic. You might save a lot of things putting it in plastic bins. Cardboard molds easily, plastic does not. Sit yo dumb ass down.

 

[Ishtar]

These sorts of articles don’t pretend the decline isn’t happening, nor do they even try to say “it’s progress”-they’re just saying “well it’s not that bad, so IDK maybe get used to it”

They are intended for millennials who are frustrated that life is shit and not improving-she can’t BS them and tell them how awesome renting is. She’s reduced to saying being a renter means you have less debt or something. (Nonsense).