People always ask me if they should buy or rent. Well many people got burned in the great recession of 2008 where prices had hit their peak then plummeted by more than 50%. Before that prices were rising steadily and everyone thought the real estate boom would last for ever with easy money and plenty of enthusiasm. When the bottom fell out of the market and millions of people lost their homes, it really did a number on the economy.
In the last couple of years things have rebounded nicely and the economy seems to be doing better. Things could be better but they could be a whole lot worse as well. So no that things have stabilized and more people are wanting to take the plunge into real estate again, is it a good idea?
Historically real estate has always been a great investment over time. In fact in all my years of buying and selling real estate, I almost always made money on my properties with just a few exceptions. Even guys like Donald Trump made most of their fortunes from real estate, so I would have a hard time betting against it.
There are always those people that will argue that renting makes more sense because it is cheaper. That may be so to some extent because you don’t have to pay property taxes and sometimes the utilities will be included. I guess the thinking is that your rent is cheaper so you have more money to invest in your retirement. However how many people are disciplined enough to save that extra money instead of spending it on a trip or a new car. To me paying the somewhat higher costs of a mortgage is like forced saving and when your house is paid off you have something that is a real asset that is worth hundreds of thousands of dollars. What will the renter have after 30 years? Maybe he could have the same amount in investments but more likely with human nature being what it is, he will have far less than the home owner.
So my answer is buy a home – it is a no brainer to me
For more information on this subject and many other real estate related topics check out Calgary realtor Carmen Paradis’s website at http://www.carmenslistings.ca
If you are in Edmonton check out RE/MAX at http://www.edmontonrealestate.com and if you want to see which homes are available, they have a great MLS search page there as well.
If you can’t afford to live in the city, check out this central alberta home builder in Clive Alberta where you can build a brand new house for under $250,000. The only problem is that you have to live in a small town.