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Real Estate Talk:
Buying vs. renting

Owning a home is one of the best and most secure investments people have

By Joseph Marovitch

July 7, 2022

There are many articles regarding homeownership versus renting, and many Canadians are discouraged from purchasing a property for different reasons. The price of homes has risen to new levels quickly due to the pandemic. Interest rates are now above 5.2%, and inflation has hit 7.7%. Both these issues cause carrying costs for a home to be significantly higher.

Yet, owning a home for many Canadian represents many things. For most homeowners, a home represents their life savings, education for the children, financing for a business, or retirement.

Owning a home affords future opportunities and puts money to work, as opposed to renting. Rent does not work for the renter; it does not grow in value. Rent is money that goes away.

Granted, owning a home is a great commitment of time, energy, money, and emotion, however, it is also one of the best and most secure investments people have. Property grows in value over time, you can refinance a home and borrow against it, acquire a homeowner’s line of credit or a reverse mortgage.

Owning a home affords future opportunities and puts money to work, as opposed to renting. Rent does not work for the renter; it does not grow in value. Rent is money that goes away.

Each mortgage payment is more equity in your pocket. Each rent payment is money gone from your pocket.

Renting is good until one finds an affordable home or if one is in retirement. If an individual has made enough money over their lifetime, why not sell the house and then rent and travel?

However, there are two out of four phases in life when a property is the investment that determines the future for many people. First, know what the four phases are:

Phase 1 – Childhood through teens – no property required yet
Phase 2 – Adulthood – buy first home
Phase 3 – Parenthood – buy larger second home
Phase 4 – Kids have moved out, and parents sell the home to buy or rent something smaller

Phase 2 is when children have grown up and moved away from their parents. The grown-up children are starting to work, make money and can now invest in a home.

Phase 3 is when the same children now have families of their own and require a larger home.

Phase 4, where people are downsizing, is when the long-term investment of owning a home comes to fruition. Many people have other forms of income, but a home is the passive money maker that contributes to the children’s future and the parents’ next step in life.

‘With rising interest rates, more homes will come to market, and pricing will be more negotiable and affordable. Eventually, the market will stabilize, and inflation will decrease as well.’

As interest rates climb, people will consume less, therefore, inflation will eventually decrease. With rising interest rates, more homes will come to market, and pricing will be more negotiable and affordable. Eventually, the market will stabilize, and inflation will decrease as well.

There is a protocol for purchasing a property and avoiding risk, involving everything from financing to inspection, which will be discussed in the next issue.

Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.

Next article: Purchasing property and avoiding risk


State of the market

Inflation is now 7.7% in Quebec, and interest rates have hit 5.2% and rising for a 5-year fixed mortgage. More homes are entering the market, but demand is falling due to high costs. It is a rocky market but give it time.

With rising costs, there are rising rents. Landlords, like everyone else, must submit to the consumer price index and, therefore, raise rents to cover costs. Except there is the issue of a housing shortage in the province.

‘More homes are entering the market, but demand is falling due to high costs. It is a rocky market but give it time.’

The past three years have not been easy, and we are still roughing it out. Health experts are stating that there are fourth and fifth variants in Quebec and are asking everyone to wear masks even though our premier says there is nothing to worry about. Must be that upcoming election making decisions for us!

Stay safe, and hold on. Everything will work out!

Have a great week.


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Other articles by Joseph Marovitch


Joseph Marovitch - WestmountMag.ca

Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children between the ages of 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep away summer camp established in 1968. Using the same strengths in caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible for, Joseph applies this to his present real estate broker career. Should you have questions please feel free to contact Joseph Marovitch at 514 825-8771, or josephmarovitch@gmail.com


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