Rent vs buy

Rent vs Buy

Friday Mar 13th, 2020

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Rent vs buy Toronto 

Many clients ask me if it is a good idea to rent vs owning a property. This is a good question for today's market and I am going to examine which is better. 

I will provide an answer to this question as many people want to know what they should. 

Renting

 The rental rates in Toronto and the gta continues to rise given the fact there is a limited supply of rental properties and with new immigrants coming in every year there is a continual need for  housing for new immigrants.  Most new immigrants will not buy a house when this first come to canada. Therefore with the continual demand for rental properties and low supply rental rates will continue to increase.
The other factor contributing to the increase in rental rates is inflation. The reality is that cost of all goods and services will continue to rise. Unless if something drastric happens with the economy or there is unusally high supply of products then inflation will continue to rise. As inflation rises so will rental rates.

So the questions is. Is it a good idea to continue renting ? With rental rates forecasted to increase without stopping anytime soon and with landlords able to raise rates in some cases to whatever they want. It is a bad idea to keep putting money into a house expense that does not provide any long term asset being held. That is basically money residents of the GTA are throwing away. There is no ownership in renting and there is no growth in value of an asset in renting. 

Let us look at owning a property.

 When someone buys a property it is true that in most cases they will have a mortgage. However the mortgage balance with go down over time and the house value should be realtively stable or increase over time. Thereby buidling equity in the property and increasing someone's net worth. Canadian house values have been stable or rising in the last 10 years. 

When is a good time to buy ?

 Well the short answer is now. Why ? If you look at the housing market in the last 5 years. We had a hyper market for buying a few years ago where people were paying hundreds of thousands of dollars over asking price for houses. Since the introduction of government measures for stricter qualifications of mortgages and intrest rates hikes the housing market stabalized. However it is starting to go back into a hyper market. It is not completely there yet but it is heading in that direction. Any one wanting to buy a property should do so before it becomes impossible again.
The benefits of owning a property are owning your own asset that you control. Not to mention the freedom from other tentants.


In conclusion which is better ? to rent or own ?


 I would say renting is a bad idea as you never really own anything and you have to deal with the annoyances of other tenants such as noise, air pollution etc. Buying a property gives you ownership of an asset that grows in value over time.

If you are looking to buy or sell a home then barry blanchard is an agent that is dedicated to doing what is right for his clients. 

contact him on 4169373877 or email: barry@realestatedepot.ca

 


Tags: buy - own - rent

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