This week, I want to talk about the importance of owning a home/property. Owning property is not an easy task especially if you live in expensive markets such as Vancouver. Owning vs. renting is a highly debated topic among millennials. There is no doubt that our previous generations prefer to own, however, millennials are different. We do not mind renting as it gives us the ability to move and not be fixated at location. I understand both sides to the debate, but I am going to focus on why I think owning property is so important and why every young adult should strive for it.
Owning property provides stability that renting does not. Being able to live in a place where you do not need to worry about getting evicted is so comforting. You do not need worry about increasing rent payments or having to move frequently. This is especially important when you are in retirement. When you retire, you do not have the flexibility and means to move frequently or pay more rent as your earning power diminishes.
As a property owner, you can do whatever you like with the property. You can renovate it, demolish it, it is all up to you. You also will not worry about having an outsider checking up on you once in a while since you are the property owner.
Good Long-term Investment
There is no doubt that for the most part, buying property is a good investment. Markets like Vancouver has been targets of foreign investors for the past 10 years. During the past 10 years, housing prices have been on rise. Those who have bought property back then would see a dramatic increase in the value of their property Despite government policies, Vancouver remains a popular destination for people to invest and live in. Even if you are not living on the property, renting it out is still a good way to generate some extra passive income. The rental income can also go toward paying down the mortgage. To succeed financially in our market economy and society, one must accumulate assets that generate value over time and owning property is one way to do so.
Significant Leverage Being a Landlord
One thing that I learned during this pandemic is how powerless tenants are. Tenants that are unable to pay their rent and have inconsiderate landlords are getting evicted. The government has stepped in to place an order preventing evictions, but it still shows how powerless being a tenant is. Basically, without government support, as a tenant, you can get evicted anytime.
There is nothing wrong about renting. In fact, in Vancouver, without our parents’ support, very few in our generation have the means to buy their own property. However, I strongly suggest that all young adults should have a long-term goal of owning a property. Think about it, each rental payment you make is one less mortgage payment you could have made. Think about your retirement. Do you want your pension cheques to go toward your rental payment (someone else’s mortgage) and do you want to risk getting evicted and having to move when you are 65+?