buy or rent in torontoThis past week, we’ve been taking a close look at the Buy vs. Rent debate. We’ve examined the pros and cons of renting and buying, and we took a deep dive into the real math. Today we’ll look at the other factors to consider when deciding if you should rent or buy.

You Should Rent if…

  • You don’t have a down payment. Critical to the math is having a downpayment- click here to read about Saving for a Downpayment.
  • You like zero risk. With risk comes return, but there are never any guarantees that prices will go up.
  • You don’t know where you’ll be in 3 or 5 years. As we saw yesterday, the numbers change over time – the longer you live in the property, the more money you’ll make. If you might be moving to Paris next year, it probably make more sense to keep on renting.
  • You can’t afford something you want to live in. We’ve strictly looked at condos this week, as most first time home buyers gravitate to condos for affordability reasons. But if you MUST live in a house, you need to consider the inevitable maintenance and renovations (and the cash flow required).

You Should Buy if…

  • You can afford to buy a property in a good location that will appreciate over time, and still have enough money to live. Never borrow as much as the bank is willing to lend you. 
  • You want to pay your own mortgage instead of someone else’s. Investing in yourself is not just empowering, it’s often the best financial move you can make.
  • You see real estate as more than investment – it’s a place to lay your hat and live your life. That you can increase your net worth is just be a bonus.

I still remember the day I decided to get into the real estate market and stop renting. I was 27 years old and hadn’t even considered a career in real estate yet. I was living in a dumpy apartment at Queens Quay and Spadina and paying $1,300 a month in rent. At the time, one bedroom condos at King/Niagara were selling for – wait for it – $150,000-$200,000. When my friend Lisa suggested I might be better off buying, I was surprised. I was single and scared, but I went for it. Getting into Toronto’s real estate market early was one of the best financial decisions I’ve ever made (and I never missed that dumpy apartment). Thanks Lisa!

If you want to discuss whether you should buy or rent, give us a call or send us an email. There is no one answer to the question, but we’d be happy to help you evaluate your options.

Missed Parts 1 and 2 of the Rent vs Buy debate?  Click here to read part 1 and part 2

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