To rent or to buy, that is the question. It’s been analysed, discussed and debated for a long time, but it’s never been more relevant than today: Based on a Calgary survey, young professionals who can afford to buy a house still prefer to rent. I’ve heard doctors, teachers, and other professionals argue that they find renting more convenient than buying.
Personally, I rented for more than four years before buying a home, and I think renting is an underrated option. People will always have different opinions, and I find myself somewhere in between. I enjoy home ownership just outside of the city; I also enjoyed renting a 17th-floor apartment in downtown Winnipeg. Home ownership isn’t for everyone, and I’m here to show you that renting a home has more advantages than you might think.
Renting is more affordable.
When you purchase a home, you don’t just pay for the property itself. You can also look forward to taxes, mortgage interest and other fees. In addition to those basics, there will be other expenses depending on the type of property you buy. We purchased a duplex, and it wasn’t long before the extra costs started to add up: gardens, fencing, driveways and landscaping are expensive!
Understanding the true cost of homeownership is not as simple as comparing a monthly mortgage payment to a rent payment. Don’t even get me started on condo fees, utilities and insurance. When buying a house, you also need to be sure that you can afford to put down a minimum of 5% for the down payment. Renters, on the other hand, don’t need to worry about most of these expenses.
No need to pay for maintenance.
Maintenance is such a huge factor that I think it deserves its own category. Here’s a great (and stinky) story about how well maintenances are usually completed by a rental company: When my husband and I came back to Winnipeg from our honeymoon in the Dominican Republic, it was almost midnight. We were tired but woke right up when we opened the door to our apartment. It smelled like something had died in there. I ran to throw open the window, and my husband checked the kitchen.
It turned out that the fridge had stopped working, and the contents of the fridge and freezer (including chicken, fish, and veggies) had been rotting for 2 weeks—yuck. You can imagine the smell! Long story short, we called the property management office, and they immediately replaced our fridge. It didn’t cost us a penny. Convinced yet? Let’s move on to the next point.
Renting = flexibility.
Usually, a rental lease is signed for a year, and then you have the option to renew. This way you have way more freedom in planning ahead. However, sometimes even the best-planned life scenario can be ruined by unplanned situations. It could be a sudden job offer in a different city, a family emergency, or you could just decide to move because the world is a beautiful place and you have to see more of it!
If you rent, you don’t have to deal with selling a house. Renting offers valuable convenience when it comes to a quick change of plans. It saves you from looking for a buyer, paying a realtor, signing papers, and looking for a new place to buy. Hand over they keys to your landlord when your lease is up, and you’re free to move on.
Renting involves less emotional and financial stress.
If you’ve ever been interested in buying a property, you’ve probably noticed that interest rates are rising. Mortgage interest rates are the highest they’ve been in 5 years, and it looks like they are destined to climb even more.
Additionally, if you cannot afford to put down 20% as a down payment, you are required to purchase mortgage insurance. Just to give a point of reference, we had to pay close to $10,000 in mortgage insurance on a house purchase in the mid-$300,000 range. Property taxes in most cities have also been increasing. Taxes and interest rates add a substantial cost to home ownership that sometimes makes buying a home financially unfeasible.
Contrary to popular belief, renting isn’t a money drain. You’re paying for the roof above your head and shelter for your family. You can save on monthly expenditures and have more flexibility when it comes to your life plans. Get the most bang for your buck by investing any money that you save monthly by renting instead of owning. Over 40 years, a diversified investment portfolio can yield an equal or even greater return than investing in buying a home. Renting a place doesn’t make you a homeowner, but it does free up cash flow that might otherwise be going to taxes, a mortgage, and unexpected expenses.
Make the decision that’s right for you
The decision whether to buy or rent a home shouldn’t be made lightly. It should involve being honest with yourself about what you want, what you need, and lists—lots of lists with numbers that will show you the advantages and disadvantages of either decision. Consider your lifestyle, your finances, and your plans. Whatever you decide, make the right decision for you, and don’t worry about what others think.
Now, let’s hear your opinion! If you have ever faced the dilemma of buying or renting, share your experience in comments below.