Windsor Homes Buying vs Renting
I am often asked whether it is better to rent or to buy. There are several sites which offer lease vs buy analysis. The main factors are to consider are:
1. Monthly Rent
2. Home Price
3. Down Payment
4. Mortgage Rate
5. Annual Property Taxes
Other items such as maintenance, cost of buying, cost of selling, operating costs such as insurance and utilities should also be considered.
As a rule of thumb, if you plan on staying in a home for more than 3 years, it is cheaper to buy.
Most people think the benefit in buying is to “stop throwing your money away on rent,” but in fact the equity you build from buying is mostly offset by the money you will “throw way” on taxes, insurance, maintenance, and mortgage interest, which renters don’t pay. The real benefit from buying is that you assume your property will increase in value over time while you continue to pay the same monthly payment for 15 to 30 years, and then you stop paying it altogether.
If property values decline, the numbers change in favour of renting fairly quickly.
2005 marked a peak in the Windsor Real Estate Market with average home prices at around $165,000.. Struggling with high unemployment and a slightly declining population, Windsor saw a decline in property values from 2006 – 2009. Many people that purchased in Windsor in 2005 and attempted to sell in 2009, did so at a loss. However, property values are again on the rise in the Windsor Area and there is a lot of money being spent on infrastructure over the next several years.
Home prices in Windsor have risen for the past four years an average of 4% per year. In addition Windsor’ Listing Sales ratio has exceeded 50% for several years and has been in excess of 60% in several areas, this is a further indication that prices will continue to rise.
Each year Buckingham publishes a Residential Market Watch showing the statistics for all of Windsor and Essex County. While this information is helpful for an over all look of the market trends, it is also helpful to look at the area you are interested in to determine what is happening in that neighbourhood. The Windsor Essex County Association of Realtors divides the County of Essex into a number of areas. Each Area has its own distinct characteristics. Buckingham has taken the time to graph Residential Listing information for Areas 1 through 60 with historic trends. It is interesting to see the differences in changes to average sales price and listing sales ratio in each area. Each area’s growth changes at a different rate.
Other Factors which make it a good time to buy in Windsor:
The current low interest rates are also very helpful in reducing mortgage payments.
Average house price of $183,000 (2013) is less than half of the National Average.
Massive infrastructure spending in Windsor and surrounding area over the next several years.
You don’t pay cash when you buy a home. If you had to do that then nobody could afford to buy a house. Instead you get a loan from a bank called a mortgage. You make payments on this loan every month for 15 or 30 years, and then you get to stop making payments.
Most homebuyers also make a cash down payment of 5 to 20% of the sale price. The higher the down payment you can make, the easier it is to get a loan, and the lower the interest rate is, and the lower the monthly payment is.
By Cameron Paine, Buckingham Realty (Windsor) Ltd., Broker