tt rto programs - home ownership
TRANSCRIPT
The Pros and Cons ofThe Pros and Cons ofThe Pros and Cons ofThe Pros and Cons of
Home Ownership Home Ownership Home Ownership Home Ownership
HOMEOWNERSHIP
WHETHER AND WHEN
Purchasing a home is a personal choice that demands careful
deliberation, the decision varies from person
to person and market to market
An evaluation of the pros and cons is required,
with input from an expert realtor, mortgage
broker, and other advisors
5 ADVANTAGES5 ADVANTAGES5 ADVANTAGES5 ADVANTAGES
1. EQUITY
Every dollar paid towards the mortgage principal is a dollar of equity for actual ownership of the property, a hedge against inflation, and part of your retirement plan
Once you have 20% ownership you can tap into a home equity loan or refinance for better terms.
You can also boost your enjoyment and the home’svalue with judicious home improvements
5 ADVANTAGES5 ADVANTAGES5 ADVANTAGES5 ADVANTAGES
2. CAPITAL GAINS
Your “principal residence” is any residential property owned and occupied by you or your family
A house, condo, cottage, mobile home, trailer or a live-aboard boat, and it need not be in Canada
Any gain on the sale of a principal residenceis tax-free
5 ADVANTAGES5 ADVANTAGES5 ADVANTAGES5 ADVANTAGES
3. POTENTIAL RENTAL INCOME
You can use your home for a source of income
to partially or totally offset ownership costs
Earn rental income following local laws and regulations
• Rent out a room, the basement, or the upstairs
• Live in one unit of a duplex and rent out the other
• Use sharing economy for short-term renters (e.g., Airbnb or VRBO)
5 ADVANTAGES5 ADVANTAGES5 ADVANTAGES5 ADVANTAGES
4. CREATIVE FREEDOM
Your decorating and DIY projects, pet ownership choices, and guests answer to no one else
Changing your living environment to suit your lifestyleis a fun and enjoyable part of homeownership
Follow building codes and homeowners’ associationrules
5 ADVANTAGES5 ADVANTAGES5 ADVANTAGES5 ADVANTAGES
5. SENSE OF BELONGING
Put down your roots and get to know your long-term neighbours; you can decide how long you stay there, not a landlord
Join community associations or organizations and sign up to attend classes and events
Volunteer for business, community, and city activities to make it a better place to live
4 DISADVANTAGES4 DISADVANTAGES4 DISADVANTAGES4 DISADVANTAGES
1. POTENTIAL FOR LOSS
Although homeownership builds equity, this doesn’t mean that profit is
automatic
If home values in your area decrease, you risk a
financial loss when you sell
4 DISADVANTAGES4 DISADVANTAGES4 DISADVANTAGES4 DISADVANTAGES
2. MAINTENANCE AND REPAIRS
You are responsible for all uninsured
maintenance and repair work on your
home
As a rule of thumb, you can expect to
pay about 1% of the value of your home
per year
4 DISADVANTAGES4 DISADVANTAGES4 DISADVANTAGES4 DISADVANTAGES
3. HOMES AREN’T SOLD FURNISHED
You need to spend time, money, and energy furnishing your home
• Furniture
• Appliances
• Window coverings
4 DISADVANTAGES4 DISADVANTAGES4 DISADVANTAGES4 DISADVANTAGES
4. HIGH UPFRONT COSTS
You can pay a over of 5% of the purchase price before possession with
down payment and closing costs (legal fees)
You could be required to pay over 10% or 20% of the
purchase price depending upon your financing
HOMEOWNERSHIP
MORE INFO
To learn know more about the costs of
home ownership or the pros and cons
of renting, read the article by Brian
Martucci, “Renting vs. Buying a House
– How to Make a Decision, Pros & Cons”
http://www.moneycrashers.com/rent-or-buy-a-house/
HOMEOWNERSHIP
REFERRALS
If you know of anyone who wants to purchase a home, but does not
qualify for a traditional mortgage, or would like to invest in real estate,
but doesn't want to be a landlord, we will pay a referral fee if they are
successfully established in a RTO program with TuCasa Today
Roy O. Christensen, RET
403.703.2686