Vancouver, BC - Real estate market in Vancouver is so hot today that many people are tortured by a same question everyday: Should we buy house in Vancouver ? Or should we just rent year by year?

For most of the renters, owning a home is a lifelong dream come true. However, how many of renters can think of executing their decision of buying a place as a good bet? Not too many! To decide whether to own a place or to buy one is sure to place you in a state of dilemma. Each of your decisions is warped with advantages as well as disadvantages. And this certainly makes it even more difficult for you to decide.

Try considering the following facts which might help you in your decision making better.

Renting vs. Owning

Advantages of Renting
- Smaller down payment
- Low maintenance costs (relatively)
- Higher fixed costs on a lease period
- Negligible deviations in the equity
- No responsibilities of maintenance
- You are blessed with the preference to move out whenever you desire to

Renting Disadvantages
- Restrictions in modifying your home
- Forget of increasing your equity
- Zero tax advantages for you, while all tax breaks for your landlord
- No proud feelings

Advantages of Buying

- You feel safe, stable and comfortable, and proud maybe
- Your equity is sure to build with the passage of time, with your mortgage costs lessening over a time period even if housing prices remain unchanged
-You can modify and revamp your house the way you want it to
- Several tax benefits attached to homeownerships

Disadvantages of Buying

- Down payment for your home is generally a big sum
- Maintenance and other costs may suffer fluctuation
- Fluctuations in equity cannot be barred
- Generally you have to sell-off your house if you wish to move out
- All the costs attached to your home must be borne by you alone

Only you can make the decision as to whether renting a home would be more feasible than buying it. For which, you ought to look beyond the mere parameters of mortgage payments. Determining your budget as well as your affordability in putting down at least 5% of the purchase price as down payment, would be your first step to consider your decision when you plan to Vancouver buy house . In order to come up with a viable decision do not hesitate from using the calculator in the calculation of monthly payments, fees or incurring of possible taxes and your endeavors of buying home in Vancouver.

To determine the extent of your eligibility for procuring mortgage, lenders use two simple rules which also help them gauge your affordability index. These simple rules in fact get governed by authoritative housing body in Canada namely the Canada Mortgage and Housing Corporation (CMHC), which is the premier mortgage loan insurance provider as well as institute for Canada's housing policy programs and research in housing.

In calculating your monthly housing costs the primary rule you should implement is to ensure that gross monthly household income (GDS) does not fall below 32% of your monthly housing costs. Moreover, you have to include taxes and heating expenses apart from monthly mortgage payments in your housing costs. Also you could consider inclusion of half of monthly condominium fees in your allotted sum of housing costs. You have to make sure that your gross monthly income (TDS) should not fall below 40% of your entire monthly debt load. Your entire monthly debt load could be inclusive of payments pertaining to personal loans, credit cards, car payments apart from the general housing costs so estimated by you.

Renting is preferred by most households as it gives them the flexibility to combat with job changes wherein moving to any new place cannot be ruled out.

In case where the nation's economy depicts a possible turmoil, renting would be the best option to go with. Also, you could adapt to certain unexpected scenarios in life better by renting a place. Fluctuations in the economy can be better dealt with through renting. Moreover, in recent times the housing index has gone up substantially thus not making it affordable to own a house anymore.

On the other hand, if you are living a stable life-style which is less dependent on external factors then owning a home makes sense. Also, rent denotes pure cash outflow, which once paid never comes back to you. The cost of renting could vary with the rise in inflation, which is generally so in most cases.

The longevity or the duration of stay you anticipate to live in your next home should be a significant factor in determining whether you desire to rent a place or buy it instead. Hence, only if you wish to stay at a single place for a long duration it is optimal for you to buy the place, otherwise think of renting a place instead. This is because if you plan to stay in your next home for a shorter duration then buying it would not make much of a financial sense, which according to research by the National Multi Housing Council (NMHC) is termed as a financial mistake.

Staying for a relatively shorter duration or a short time such as mere couple of years in your next home would defeat the theory of total cost of homeownership. Also, if your other payments such as utility bills, repair costs, property taxes, and maintenance costs are to be considered in the cost of ownership then in my opinion it would indeed be a financial debacle for buying a house just for that short period of time, especially buying house in Vancouver. In your decision of owning a house, make sure to consider transaction costs such as estate broker's commission, escrow fees, loan origination charges, brokerage commission and costs involved in title transfer, wherever applicable.

You also have to spread the one-time costs involved in the transaction of buying or selling your house across your span of owning the place. For any person planning to live in a place for around 20 years, it is preferable to ascertain annualized transaction costs. However, the same could not be beneficial for someone who plans to live in a place for a very short duration as ascertaining of annualized transaction costs to such candidate could prove to be a substantial amount and which therefore could be a significant factor in determining whether such person would prefer to own the place or just rent it. If you own a place with high housing costs then you might also like to consider mortgage interest tax deduction which has been a lucrative homeownership perk for many house owners.

Many economists have coined the term "opportunity costs" in order to define the potential gain that would have made by the homeowner had he invested the same money in some other avenues of investment other than in buying of his existing house. In homeownership, the equity factor which stands in your favor as a homeowner is the down payment made by you during the purchase of your house. As such, your down payment attracts attractive return in case of appreciation in property prices, and vice versa where property prices depreciate or fall. In most cases, property values appreciate with time. But scenarios prevail where you can suffer huge loss on investment if property prices depreciate.

As per NMHC researchers, the houses that were bought in mid 1980's would have saved money for most of the families from the source of renting comparable housing. Due to the high amortization costs, the ownership costs prevailing at that point of time were relatively unfavorable.

Although rental housing is an essential part of the NHMC agenda, you have to weigh the risks of homeownership along with the financial costs to make the right decision in whether to rent or buy home in Vancouver.

In your owning a house, your monthly payment of mortgage would in fact reflect on increasing your equity as well as your credibility in the market, whether bankers or other loan lending organizations.

Likewise, capital gain arises from purchasing of home, as in most cases housing prices tend to appreciate with time.

A house bought in 1975 in Vancouver for $57,000 is now worth over $900,000 in 2012 makes buying a home formidable option.

Owning a house renders you increased privacy along with good control over your property. You do not have to worry about landlords and any permission you would otherwise have to ask for carrying out modifications to your living place. Also, you have more benefits to reap from owning a place than face certain demerits of inconsequence.

However, to each his own! As buying a home for some could prove to be a costly affair to cope with, renting would be a feasible option for them. In the end, one ought to dwell into his independent scenario without getting swayed away by any lucrative notions attached to owning of a house.

For more information on Housing in Vancouver, please visit http://www.squidoo.com/housing-in-vancouver or http://www.house-vancouver.com/