Should I Keep Renting or Buy?

You’ve got to live somewhere, right? But does it make more sense to rent or buy your dwelling?

Apples to Apples

If your argument is that a mortgage payment would be similar to a rent payment, you must consider that in context- as well as include all the expenses- beyond the actual payment.

While the appeal of building equity for yourself rather than someone else is not in dispute, there are more payments and expenses on a monthly basis when you are an owner rather than a renter.

Remember extras like property taxes, maintenance and insurance- and possibly monthly fees to an association, depending on what kind of property type you choose.

Lifestyle

Are you able to afford the time and money to dedicate yourself to homeownership? Homeownership involves far more than just signing a deed.

If something breaks down- you are responsible both for the act of fixing it, as well as for the expense. Are you prepared for that?

Do you value freedom and flexibility? Owning a home lets you put down roots- but also requires a long term commitment to stay in one place (especially if you want to be able to reap equity from your purchase, which can take several years before you technically “break even”).

Local Market

One of the real decisions to make around home ownership is the cost of property in your local market. Markets in some major centres (like Toronto and Vancouver for instance) are absolutely exploding- and the costs of jumping into the market can be prohibitive.

Between increased amounts for down payment (which is typically 5% of purchase price) plus the escalating costs of property themselves (especially if you seek shelter in the urban core, or in sought-after areas), this is not a cost to be trifled with.

For many, renting in these hot markets is the option that matches the budget.

Location, Location, location

If you do decide to buy- there are certain principles that will both preserve and grow the asset value of your property.

Beyond two bedrooms and a backyard on your wish list, include proximity to green space, public transport and to amenities (shopping, recreation centres, and most importantly, schools).

Even if you don’t need a school in your life right now, that is a huge selling feature for many down the road.