Why get stuck with the rent?
By Cameron Weir
Today's real estate market is providing first time buyers with ample opportunity to enter into the market. With mortgage interest rates at all time lows, and a dramatic swing in the market it is time to explore ownership. The process of finding your ideal property can be both very trying and exciting. That is where you realtor comes in, providing you with sound advice from start to finish.
From a price point perspective, to enter into the Toronto market, condos and lofts are generally best fit for a first time buyer. Aside from the ticket price of a condo or loft you must not overlook major variables such as maintenance fees, and taxes. So if you are renting or know somebody renting please look at the following example beneath for the bottom line.
Here is an example of what it would cost you to own a unit with one plus bedrooms, parking, and maintenance fees under $450/month**There are over a hundred properties that fall into this category within Toronto**
1005 King West-asking- $ 279,000, Sold- $273,000
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Asking Price: $ |
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Taxes: $ |
/ year |
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Interest Rate: |
% |
Condo Fees: $ |
/ year |
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Amortization: |
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Up front Costs:
**First Time Buyers will be reimbursed on the first $400,000 of a property purchase. ($8200)**
Down payment: $13,650
Land Transfer Tax: $5000
Lawyer fees: $ 1400
Moving Costs: $ 800
Total Up front Costs: $20 850
There you could be the proud owner of a unit in Toronto for as little as $1369 a month all in! (If you meet the above criteria)To rent a unit with similar features you would be spending $1500 plus a month with nothing to show for it at the end. (That's $18000 a year more than it would cost you to enter into the market)
In conclusion, buying a property is a good investment for a great variety of reasons. Your property taxes and any paid interest can be tax-deductible at the end of the year. When you rent a place, there are no guarantees that the price will not go up from one month to the next. With a mortgage, you can opt to go for a fixed-rate loan, which would mean that you know exactly what you are paying out each month. Paying the monthly mortgage it really is no different from paying the rent each month accept you are an owner!