Despite what every 1950s sitcom tells us, buying your own home is not the end-all be-all of adult life. For many people, the idea of home ownership is not only unappealing, but incredibly impractical for their lifestyle. If you’re uncertain of whether or not you should buy or rent, we have some factors for you to consider before making any big decisions.
Before, renting meant you were limited to apartments buildings and complexes; If you wanted anything bigger, you had to buy it. Luckily, that’s no longer the case. You can rent a variety of properties (from condos to houses to, yes, apartments) for considerably cheaper than it would cost to own them. This can be great for people who don’t want to feel tied down to a property and who crave the freedom that comes with being able to pick up and move as soon as the lease is up without any extra baggage (aside from the literal baggage you take with you).
If you’re the type of person who loves being able to explore living in different places (or who has to move around a lot for work), then renting is definitely the best option. There’s no point forking out hundreds of thousands of dollars if you’re not planning on staying put for very long. Generally it’s a better idea to rent if you can see yourself moving in or around the three year mark of being there. On the other hand, if you’re looking for stability and have no intention of move anywhere for the foreseeable future, then owning a home is likely worth it. In addition to owning your own property, you get the peace of mind of knowing that no one can force you to move or kick you out (like a landlord can do with a renter). You won’t have to suddenly uproot your life on the basis of someone else’s whims.
This is easily one of the most important factors to determine whether you should rent or buy. Renting is definitely the cheaper option on a month by month basis, but unlike with buying a home, your money isn’t actually going to anything other than the landlord’s pockets. Home buying is expensive (and you have to deal with taxes, insurance, maintenance, and utilities – amongst other things – on top of your mortgage payment) but at least you know your money is going towards having total and complete ownership of your property.
With renting, you’re completely subservient to the landlord. Yes, you save money because they’re the ones responsible for any upkeep or maintenance issues, but they also have the right to raise the rent at the end of the lease, sell the property (meaning you have to move out), or not continue to rent to you. You’ll save money by renting but you’ll also have to sacrifice stability and control.
Responsibility vs Flexibility
This is where your personality comes into play. Are you the type who wants to have total control over where you live (even if it means taking on extra financial burdens and responsibilities) or would you prefer the flexibility and ease that comes with being able to pick up and move at the drop of a hat?
Home owners have to pay more and are the sole ones responsible for any maintenance or repairs, but they can also basically do whatever they’d like decor and renovation-wise (as long as they don’t violate any by-laws). Renters are often very limited in what aesthetic additions they’re allowed to make to the property they’re renting (which can result in their house not feeling quite as homey as they’d like).
On the flip side, renters will never have to pay to have their basement renovated because of flooding or their porch replaced because of termites. They’ll also have significantly fewer economic worries about the housing market crashing (if anything, they’ll be able to rent a property at an even lower rate).
There is no set formula for who should rent or who should buy. At the end of the day, it comes down to your finances, lifestyle, and the level of control you want over your living situation. In case you need a little help crunching the numbers, the Globe and Mail has a Rent versus Buy calculator to help you here.