Pros and Cons

Whether you need a live/work or work-only space, there are many reasons to consider purchasing. Property ownership often requires a significant commitment of time, effort and cash, but for most people the rewards justify the investment. Reasons you might consider buying include:

• Stability of Tenure: You won’t have to move just because the landlord sells the property or raises the rent so high that you are forced to relocate.
• Professional Freedom: You are the master of your space. You can work as you wish, whenever you wish, and do what you wish with the space, as long as you follow applicable zoning laws and building codes.
• Financial Investment: Historically, real estate has been a sound financial investment, especially over the long term. There are peaks and valleys, as with any investment, but if you are not forced to sell at the wrong time, you will see a financial return, build up financial equity in the property, and reduce your mortgage debt. Property, as an asset, should increase your borrowing power, as lenders view property owners as less of a financial risk. As a property owner, you can also deduct a portion of the mortgage interest and real estate taxes you have paid on your Federal Income Tax Returns.

However, ownership is not for everyone, and there are risks. Ownership issues to consider:

• Decline in Property Value: There is no guarantee that your property’s value will increase. Depending on where you purchase, it might even decrease.
• Maintenance: Routine maintenance is a necessary evil of property ownership. Besides the daily requirements of caring for your space, you also need to be prepared for the inevitable replacement of big-ticket items such as the roof and windows.
• Reduced Flexibility: It’s not as easy to take off for a 12-month residency or go abroad for extended periods of time when your mortgage payments are due and you must adddress property maintenance needs. Trying to sell too quickly means that you might not maximize the property’s value. A large mortgage payment could also make it difficult to put money towards other important investments such as additional art-related expenses, savings plans, health insurance and vacations.